If my interpretation of the Standard Terms and Conditions is correct ...
Your arrangement could be extended by the Supervisor, solely for the purposes of fulfilling the the arrangement. This may be done on only 2 occasions. The First Extension may be for a maximum of 6 months and the second for a maximum of 3 months
You are quite right with regards to your comments on the Standard Ts and Cs -
An Extension Notice shall be sent not less than 7 days prior to the date upon which the Arrangement is otherwise due to complete and must state the reason or reasons for the extension.
Such notice is to be served upon debtor and creditors. I would therefore expect to receive notice of an initial extension of 6 months and if the arrangement is not concluded within that time period I would then expect to receive a second notice of extension for a maximum of a further 3 months.
If the arrangement is not concluded within those additional 9 months, then strictly speaking, the Supervisor has to convene a meeting of creditors to vary the terms of the proposal.
In your case, I am assuming that you have complied with the terms as you saw them to be and have paid over what you considered was expected of you.
Was your Nominee aware of there being a liability due to H M Revenue and Customs? If he / she was aware of this fact then I am totally perplexed as to how an arrangement with a duration of only 2 months could have even been considered - Even if the Nominee was under the impression that all Tax and VAT returns had been submitted and your affairs, with the exception of payments to H M Revenue & Customs, were up to date, a 2 month arrangement would be pushing it!
Feel free to correct me if I am wrong, but unless the Supervisor has served the debtor and creditors with either the requisite notice(s) of extension to the arrangement or a notice of a creditors meeting to vary the terms of the arrangement, then the arrangement technically expired after the two months. As such the Supervisor would no longer have any locus standi and the arrangement would be considered failed.
Again correct me if I am wrong - Depending upon the terms of the arrangement, the funds that the Supervisor now holds could still be distributed pari passu between your crediotrs, but unless I am mistaken, such distribution would not be in full and final settlement of your liabilities and as such the creditors could still pursue for the balance.
Last edited by Cybus on Wed Oct 28, 2009 10:36 pm, edited 1 time in total.
I have made an edit to my post, which I think answers the question.
Unless you have been served with the requisite notice, I believe the arrangement was unsatisfactorily concluded after two months. I cannot confidently say that I am 100% right though.
A satisfactory conclusion would be the arrangement giving the stated return to creditors within the stipulated timescale in accordance with the terms of the proposal.
In the event of there not being a satisfactory conclusion then what happens to the monies paid in to the arrangement is dependent on the terms of the voluntary arrangement proposal itself. How the terms are presented will have an effect on your position, I believe.
There should be a paragraph that explains exactly how assets realised for the benefit of Voluntary Arrangement creditors are to be treated and further it should state how said assets are to be dealt with in the event of failure of the arrangement or if there is a presentation of a bankruptcy petition.
I do not believe the Standard Ts & Cs cater adequately for this. Having also briefly reviewed them, I am now even more at a loss as to how a two month arrangement could have been proposed. Was the Nominee aware of there being Crown Department creditors when the proposal was drafted? Or has he / she chosen to incorporate something in to the body of the proposal that over rules the Standard Terms and Conditions' provisions for Tax Authority creditors?
I think you need to contact your supervisor in the morning and determine exactly what is happening with your arrangement.
Last edited by Cybus on Wed Oct 28, 2009 11:27 pm, edited 1 time in total.
It was a mad idea to run an IVA with a HMRC debt over 2 months - and your Supervisor is accountable for confirming his decision to present on this basis.
Cybus raises some very good technical points - but if you are to challenge the Supervisor, you will need to demonstrate that parties are being prejudiced as a result of his failure to serve proper notice - he can go to Court to get the Court to rule a retrospective time extension if necessary or to seek further directions.
If I were you I would ask the Supervisor to correct his failure to serve notice, but I would take it on the chin that you may get caught for a windfall, as the alternative is for the IVA to be deemed failed leaving the Supervisor with locus stadi to deal with the trust which survives any failure in my honest opinion.
