Posted: Fri Nov 08, 2013 11:05 pm
Thank you for your email.
A case can only be passed to closure once all obligations to the IVA have been met. While completing our initial closure review it was found that your final Income and Expenditure review was outstanding, this needs to be completed before we can commence with the closure of your case. This has been raised with our Review Team who have requested the required information to complete this.
Once the review has been completed your case will be passed to closure. I would advise that is process typically takes up to six months. I have outlined the closure process below.
To ensure the accurate and compliant closure of your case, we undertake a comprehensive review of the IVA assets, as detailed in your original proposal, or any modification that you agreed to. We will also review compliance to non-financial obligations placed upon both you (the debtor) and us (the supervisor).
After the Closure review, there is a Liability review which involves the agreement of Creditor claims. This is usually the most time consuming element of the process as some creditors still have not made their claims by the time the IVA reaches closure. We review all claims and make contact with those creditors who have not yet submitted a claim, or who's claim requires evidence. We are required to give creditors a further 28 days to lodge their claims and if there are any unresolved issues it may be necessary to extend the deadline.
If your IVA has been administered by us from another Insolvency Practitioner (IP), you may experience delays at closure due to a number of issues which we may need to resolve prior to closure. Two issues which we have identified on some cases relate to the overpayment of fees to the former IP and the need to ensure an equalised distribution of dividends. It is important to us that your Arrangement is closed correctly, so any such issues identified must be resolved before completion.
The last stages in the closure process include bank account closure and a final review to assess interim dividends paid to date and to calculate the final dividend to your creditors. We then ensure the compliant distribution of funds to your creditors.
We are required by law to produce a Final Report to your creditors summarising the Arrangement. This document will be published to your known unsecured creditors, the court where the Arrangement was registered (if applicable), to the Registrar of Voluntary Arrangements and to you. We will also produce a Certificate of Completion; this is your evidence that the Arrangement was successfully completed; keep it safe.
Currently your case is in the initial review stage however all creditor claims have been agreed. Unfortunately due to the changes in the industry in relation to PPI there have been further delays which we regret.
The issues surrounding Payment Protection Insurance and the treatment of compensation in respect of miss-sold PPI are impacting all IVA Supervisors across the industry. Grant Thornton have sought independent legal advice to gain clarity on these issues and have decided to investigate the possibility of miss-sold PPI on all of our cases, for the benefit of your creditors.
Miss-sold PPI existed prior to the approval of your IVA and therefore constitutes as a contingent asset in your Arrangement. We fully understand that clients may not have been aware of this contingent asset however the fact remains that had creditors been aware of this asset at the beginning of the Arrangement, they would have sought the benefit of it. Please bare in mind that in an IVA, creditors typically have to write off a significant percentage of debt, therefore they will seek to minimise the loss through the recovery of PPI.
Any PPI awarded to you, now must come into your Arrangement for the benefit of your creditors.
Currently the investigation into miss-sold PPI is unfortunately delaying all of our clients currently waiting to have their cases closed. We have been seeking ways to bring about a resolution to this matter that will allow cases to progress to completion and ensure both the debtor and supervisor fulfil their obligations under the IVA.
The solution that has been implemented by Grant Thornton is a formal Variation to the Terms and Conditions of all IVAs under our supervision. The variation will allow us to close the IVAs and deal with PPI separately and after having closed the IVA. Unfortunately we are unable to close any cases until this Variation meeting has taken place.
The documentation regarding the MVM (Mass Variation Meeting) were sent to you. This documentation explained what we propose to do with regards to the MVM, to which you have consented.
Once we have mass consent, we will then begin to call the creditor meetings. This will vary the original terms of your Arrangement to allow us to progress with closure despite the fact that there is the possibility of unrealised assets, such as miss-sold PPI. This will prevent delays in the long-run however it has taken some time to put this procedure in place for all of our clients.
I trust this is satisfactory, however should you have any further queries please do not hesitate to contact customer services on 0844 8552166.
Regards
Jonathan
A case can only be passed to closure once all obligations to the IVA have been met. While completing our initial closure review it was found that your final Income and Expenditure review was outstanding, this needs to be completed before we can commence with the closure of your case. This has been raised with our Review Team who have requested the required information to complete this.
Once the review has been completed your case will be passed to closure. I would advise that is process typically takes up to six months. I have outlined the closure process below.
To ensure the accurate and compliant closure of your case, we undertake a comprehensive review of the IVA assets, as detailed in your original proposal, or any modification that you agreed to. We will also review compliance to non-financial obligations placed upon both you (the debtor) and us (the supervisor).
After the Closure review, there is a Liability review which involves the agreement of Creditor claims. This is usually the most time consuming element of the process as some creditors still have not made their claims by the time the IVA reaches closure. We review all claims and make contact with those creditors who have not yet submitted a claim, or who's claim requires evidence. We are required to give creditors a further 28 days to lodge their claims and if there are any unresolved issues it may be necessary to extend the deadline.
If your IVA has been administered by us from another Insolvency Practitioner (IP), you may experience delays at closure due to a number of issues which we may need to resolve prior to closure. Two issues which we have identified on some cases relate to the overpayment of fees to the former IP and the need to ensure an equalised distribution of dividends. It is important to us that your Arrangement is closed correctly, so any such issues identified must be resolved before completion.
The last stages in the closure process include bank account closure and a final review to assess interim dividends paid to date and to calculate the final dividend to your creditors. We then ensure the compliant distribution of funds to your creditors.
We are required by law to produce a Final Report to your creditors summarising the Arrangement. This document will be published to your known unsecured creditors, the court where the Arrangement was registered (if applicable), to the Registrar of Voluntary Arrangements and to you. We will also produce a Certificate of Completion; this is your evidence that the Arrangement was successfully completed; keep it safe.
Currently your case is in the initial review stage however all creditor claims have been agreed. Unfortunately due to the changes in the industry in relation to PPI there have been further delays which we regret.
The issues surrounding Payment Protection Insurance and the treatment of compensation in respect of miss-sold PPI are impacting all IVA Supervisors across the industry. Grant Thornton have sought independent legal advice to gain clarity on these issues and have decided to investigate the possibility of miss-sold PPI on all of our cases, for the benefit of your creditors.
Miss-sold PPI existed prior to the approval of your IVA and therefore constitutes as a contingent asset in your Arrangement. We fully understand that clients may not have been aware of this contingent asset however the fact remains that had creditors been aware of this asset at the beginning of the Arrangement, they would have sought the benefit of it. Please bare in mind that in an IVA, creditors typically have to write off a significant percentage of debt, therefore they will seek to minimise the loss through the recovery of PPI.
Any PPI awarded to you, now must come into your Arrangement for the benefit of your creditors.
Currently the investigation into miss-sold PPI is unfortunately delaying all of our clients currently waiting to have their cases closed. We have been seeking ways to bring about a resolution to this matter that will allow cases to progress to completion and ensure both the debtor and supervisor fulfil their obligations under the IVA.
The solution that has been implemented by Grant Thornton is a formal Variation to the Terms and Conditions of all IVAs under our supervision. The variation will allow us to close the IVAs and deal with PPI separately and after having closed the IVA. Unfortunately we are unable to close any cases until this Variation meeting has taken place.
The documentation regarding the MVM (Mass Variation Meeting) were sent to you. This documentation explained what we propose to do with regards to the MVM, to which you have consented.
Once we have mass consent, we will then begin to call the creditor meetings. This will vary the original terms of your Arrangement to allow us to progress with closure despite the fact that there is the possibility of unrealised assets, such as miss-sold PPI. This will prevent delays in the long-run however it has taken some time to put this procedure in place for all of our clients.
I trust this is satisfactory, however should you have any further queries please do not hesitate to contact customer services on 0844 8552166.
Regards
Jonathan
