IVA terminated in 2008 after one year. Is it right for them to keep PPI awarded 2015 ?

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Michael Peoples

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Post by Michael Peoples » Mon Nov 23, 2015 2:49 pm
It is never an asset of the IVA company. However it used to be that fees were paid for the time spent or an annual fee which covered the work done and this was fine. However the structure was changed so the IP was paid based on what they collected so this could encourage firms to squeeze every last penny out of their clients and obviously PPI could enhance the fees significantly.

However, there are certainly circumstances whereby an IP would welcome a payment from an old case especially if they themselves had never been paid. The original poster states that they cancelled the IVA agreement but does not explain why. This would likely mean that neither IP nor creditor got paid and if there is a PPI claim due then I think in fairness it should go to the IP and cover the IP costs and the debt to creditors.
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lifenoteasy

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Post by lifenoteasy » Mon Nov 23, 2015 3:27 pm
That's terms and conditions of contract - not the iva agreement administered by the ip between the debtor and creditor (although from a debt collection perspective no one can be called a debtor now).

Additionally given that 6 years have now passed the ip would need to demonstrate the contract is still valid and has ensured that the terms were known.

Interesting court case if it ever got that far.

Comes down to ips implying that they have a lot of power supported by law without demonstrating legislation abs section that applies.

I'm not a lawyer - that's what I learnt from someone who is and who is used to challenging implied references.
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
 
 

Michael Peoples

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Post by Michael Peoples » Mon Nov 23, 2015 3:46 pm
I am not a lawyer either so it would be interesting to see how such a case panned out. There would certainly be a question as to how long a 'trust' can survive as opposed to a contract or terms and conditions but personally I would be arguing that the trust is still valid.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
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If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
 
 

lifenoteasy

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Post by lifenoteasy » Mon Nov 23, 2015 3:51 pm
I wouldn't.

I have nothing against people being paid for the work they have done but I would suggest that for any IP any IVA that has failed is the equivalent of a failed bet that it would succeed (and please anyone reading only take this comment in the context of this conversation).
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
 
 

Michael Peoples

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Post by Michael Peoples » Mon Nov 23, 2015 5:00 pm
Lifenoteasy.
I fully appreciate the context of this discussion and as so will try and back my position up. It is healthy debate and as you say neither of us are lawyers anyway! Underneath I will quote from the R3 T&Cs and I think they are quite clear.

26 Arrangement assets
26 Property other than Excluded Assets belonging to or vested in the Debtor at the
date of commencement of the Arrangement which would form part of the Debtor’s
estate in a bankruptcy shall be subject to the Arrangement and be an asset thereof.

28 Trust of Arrangement assets
28(1) [Assets in the possession of the Debtor] Property constituting an asset of the
Arrangement in the possession, custody or control of the Debtor shall be held by the
Debtor upon trust for the purposes of the Arrangement until realisation thereof (if so
provided) in accordance with the Arrangement.

28(2) [Assets in the possession of the Supervisor] Property constituting an asset of
the Arrangement in the possession, custody or control of the Supervisor shall be held
by the Supervisor upon trust for the purposes of the Arrangement

The T&Cs then go on to say;

28(3) [Trusts to survive termination of Arrangement] The trusts referred to in Subparagraphs
(1) and (2) shall not come to an end upon termination of the Arrangement.
Instead those assets shall be got in and realised by the Supervisor, and any proceeds
applied and distributed in accordance with the terms of the Arrangement.

I have picked a few bits from the T&Cs but to me it says that any asset that would form part of a bankruptcy estate is an asset in the IVA. These assets are to be realised for the benefit of creditors and if this is not done during the term then the trust continues. Termination of the IVA does not sever the trust so the PPI remains an asset of the IVA.

What do you think?
Michael Peoples | McCambridge Duffy Insolvency Practitioners
http://www.mccambridgeduffy.com
If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
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