Notice of liquidators’ final account before dissolution Name of Company HCL Realisations 2013 Ltd Company Number (a) FC030174 We (b) David James Kelly, Ian David Green and Toby Scott Underwood the joint liquidators of the company, give notice to creditors and members that:- the company's affairs are fully wound up; the creditors have the right to request information from the liquidator under rule 18.9 of the Insolvency (England and Wales) Rules 2016 (IR16) (c); the creditors have the right to challenge the liquidator's remuneration and expenses under rule 18.34 IR16 (c); a creditor may object to the release of the liquidator by giving notice in writing to the liquidator before the end of the prescribed period; the prescribed period is the period ending at the later of— o eight weeks after delivery of the notice, or o if any request for information under rule 18.9 IR16 or any application to court under that rule or rule 18.34 IR16 is made when that request or application is finally determined; the liquidator will vacate office under section 171 of the Insolvency Act 1986 (IA86) on delivering to the registrar of companies the final account and notice saying whether any creditor has objected to release; and the liquidator will be released under section 173 IA86 at the same time as vacating office unless any of the company's creditors objected to the liquidator's release. Dated: 23 October 2017 The joint liquidators contact details are: (d) postal address: PwC LLP, Central Square, 29 Wellington Street, Leeds, LS1 4DL email address: [email protected]telephone number: 0113 289 4804 (a) If the company is incorporated outside the UK or is an unregistered company comply with IR16 r1.6 (b) Insert full names of liquidators (c) Details of these rights can be found overleaf (d) insert a postal address for the office-holder and either an e-mail, or telephone number, through which the office holder may be contacted In accordance with rule 6.28 of the Insolvency (England and Wales) Rules 2016
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Notice of liquidators’ final account before dissolution report under rule 18.3, or final account under rule 18.14 which first reports the charging of the remuneration or the incurring
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Notice of liquidators’ final accountbefore dissolution
Name of Company
HCL Realisations 2013 Ltd
Company Number (a)
FC030174
We (b) David James Kelly, Ian David Green and Toby Scott Underwood
the joint liquidators of the company, give notice to creditors and members that:-
the company's affairs are fully wound up;
the creditors have the right to request information from the liquidator under rule 18.9 ofthe Insolvency (England and Wales) Rules 2016 (IR16) (c);
the creditors have the right to challenge the liquidator's remuneration and expenses underrule 18.34 IR16 (c);
a creditor may object to the release of the liquidator by giving notice in writing to theliquidator before the end of the prescribed period;
the prescribed period is the period ending at the later of—
o eight weeks after delivery of the notice, or
o if any request for information under rule 18.9 IR16 or any application to courtunder that rule or rule 18.34 IR16 is made when that request or application isfinally determined;
the liquidator will vacate office under section 171 of the Insolvency Act 1986 (IA86) ondelivering to the registrar of companies the final account and notice saying whether anycreditor has objected to release; and
the liquidator will be released under section 173 IA86 at the same time as vacating officeunless any of the company's creditors objected to the liquidator's release.
Dated: 23 October 2017
The joint liquidators contact details are:
(d) postal address: PwC LLP, Central Square, 29 Wellington Street, Leeds, LS1 4DL
(a) If the company isincorporated outside theUK or is an unregistered
company comply withIR16 r1.6
(b) Insert full names ofliquidators
(c) Details of these rightscan be found overleaf
(d) insert a postal addressfor the office-holder and
either an e-mail, ortelephone number, throughwhich the office holder may
be contacted
In accordance with rule6.28 of the Insolvency(England and Wales)
Rules 2016
Creditors’ right to request information under rule 18.9 IR16
The following may make a written request to the liquidator(s) for further information about remuneration orexpenses set out in a final account—
(a) a secured creditor;
(b) an unsecured creditor with the concurrence of at least 5% in value of the unsecured creditors (includingthe creditor in question);or
(c) any unsecured creditor with the permission of the court.
A request, or an application to the court for permission, by such a person or persons must be made or filed withthe court (as applicable) within 21 days of receipt of the account by the person, or by the last of them in the caseof an application by more than one member or creditor.
The liquidator(s), within 14 days of receipt of such a request respond to the person or persons who requestedthe information by—
(a) providing all of the information requested;
(b) providing some of the information requested; or
(c) declining to provide the information requested.
The liquidator(s) may respond by providing only some of the information requested or decline to provide theinformation if—
(a) the time or cost of preparation of the information would be excessive; or
(b) disclosure of the information would be prejudicial to the conduct of the proceedings;
(c) disclosure of the information might reasonably be expected to lead to violence against any person; or
(d) the liquidator is subject to an obligation of confidentiality in relation to the information.
A liquidator who does not provide all the information or declines to provide the information must inform theperson or persons who requested the information of the reasons for so doing.
A creditor who need not be the same as the creditor or members who requested the information, may apply tothe court within 21 days of—
(a) the liquidator giving reasons for not providing all of the information requested; or
(b) the expiry of the 14 days within which an liquidator must respond to a request.
The court may make such order as it thinks just.
Creditors’ right to challenge the liquidator's remuneration and expenses under rule 18.34 IR16
An application to court may be made in a winding-up on the grounds that—
(a) the remuneration charged by the liquidator(s) is in all the circumstances excessive;
(b) the basis fixed for the liquidators’ remuneration under rules 18.16 and 18.20 IR16 is inappropriate; or
(c) the expenses incurred by the liquidator(s) are in all the circumstances excessive.
Such an application for one or more of the orders set out in rule 18.36 or 18.37 IR16 may be made by—
(a) a secured creditor,
(b) an unsecured creditor with either—
(i) the concurrence of at least 10% in value of the unsecured creditors (including that creditor), or
(ii) the permission of the court.
The application by a creditor must be made no later than eight weeks after receipt by the applicant of theprogress report under rule 18.3, or final account under rule 18.14 which first reports the charging of theremuneration or the incurring of the expenses in question.
On 9 December 2013 Toby Underwood, Ian Green and I were appointed joint administrators of the Company.
The administration ended on 18 November 2014, when the Company went into creditors’ voluntary liquidation
and we were appointed as Liquidators.
You may recall that, following the administrators’ appointment, the majority of the Company’s business and
assets were transferred to HCPL. Following this transfer there were no further valuable assets of the Company
to realise.
As part of the transfer, HCPL undertook to pay the trade creditors of the Company in full via four instalments.
Unfortunately, in June 2014, HCPL delayed payment of the final two instalments due to financial difficulties it
was encountering.
At the end of the administration the only outstanding matter was the resolution of the payment of creditors
undertaken by HCPL, and the distribution of the prescribed part funds put aside to any creditors that remained
unpaid.
Regrettably, after our appointment as Liquidators, HCPL entered compulsory liquidation on 17 August 2015,
without making all the payments due to legacy trade creditors under the sales agreement. This meant that a
much larger pool of unsecured creditors than previously expected had claims against the Company.
Upon the compulsory liquidation of HCPL, the position of the Company’s unsecured creditors “crystallised” and
meant the Liquidators’ could invite unsecured claims from creditors for the unpaid balance that remained, and
begin to adjudicate upon these claims.
Due to the unique set of circumstances on this case, it was necessary to liaise extensively with creditors, ex-
Company directors and liquidator of HCPL (being the Official Receiver) to ascertain the correct value of
creditors’ claims and to unsure the repayments made by HCPL were correctly deducted. Furthermore, due to
the high value of a number of claims, a substantive review of certain claims were undertaken.
More details can be found on the unsecured claims process on the page overleaf.
What we’ve done during the liquidation
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Outcome for creditors
Secured creditors
The Bank’s lending to the Company as at the date of the prior administration was in the region of £102 million
and was secured by a debenture dated 15 April 2011. This security gave the Bank fixed and floating charges over
all the Company’s assets.
The amount owing to the Bank was adjusted as part of the consideration for the sale of the business and assets
to HCPL, which meant that the Bank reduced its secured debt by approximately £100m to £2m. There was an
implied value of the assets transferred to HCP of some £40m, which meant that the prescribed part was at the
maximum value of £600,000. Third party contributions were made to provide funds to the administration
sufficient to meet the prescribed part together with the anticipated costs of the administration and the
subsequent liquidation. Any funds realised which were not required for the prescribed part and costs were
therefore distributable to the Bank under its floating charge.
The Bank therefore received the surplus funds that remained in the Company’s bank account after the
fulfilment of all the Liquidation costs. This totalled £14,037.
The Bank therefore wasn’t repaid in full under its security and suffered a significant shortfall.
Preferential creditors (mainly employees)
In their statement of affairs, provided to the administrators, the directors thought that preferential claims
would total around £642,000. However, all employees transferred to HCPL in the sale of the business. This
meant there were no preferential creditors of the Company.
Unsecured creditors
Dividends become available for unsecured creditors when there are sufficient funds (after costs of the
liquidation) to pay the secured and preferential creditors in full, with an amount left over. In certain
circumstances, part of the amount available for secured creditors may be ring-fenced for the benefit of
unsecured creditors. This prescribed part is paid out of ‘net property’, which is floating charge realisations after
costs, and after paying - or setting aside enough to pay - preferential creditors in full. But it only has to be made
available where the floating charge was created on or after 15 September 2003.
The prescribed part applied in this case as there is a floating charge created after 15 September 2003. The
amount of the prescribed part is:
50% of net property up to £10,000; plus
20% of net property above £10,000; but
Subject to a maximum of £600,000.
You may recall that as part of the sale of the business and assets of the Company £600,000 was provided to
distribute to unsecured creditors (this being the maximum prescribed part amount).
As mentioned above, HCPL undertook to repay the Company’s trade creditors, to be repaid in four instalments
over the preceding twelve months. However, before HCPL could repay all the trade creditors in full, it entered
compulsory liquidation.
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Based on the Company’s records, this resulted in a reduction of the unsecured creditor balance relating to trade
creditors from approximately £5.5 million on appointment, to £1.9 million before HCPL’s insolvency (a
reduction of 65%).
On 19 September 2016 we issued a notice of intended dividend to all creditors with a final deadline date of 11
October 2016 for unsecured creditors to submit any unsecured claim they may have.
Following the expiry of this proving date, claims worth a total of £9,945,475 were agreed.
Subsequently, on 8 December 2016 a first and final dividend totalling £535,000 was paid to unsecured
creditors resulting in a dividend of 5.38 pence in the £.
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Unsecured distribution As above, the first and final distribution to unsecured creditors totalling £535,000 was paid in the period.
Statutory and compliance
Tax matters Following the submission of the final tax computation in the previous period, we have liaised with HMRC in the period to successfully obtain formal tax clearance.
VAT matters A final VAT 426 input tax reclaim was submitted in the period to recover the VAT paid on the final invoices in the period.
Investigations and actions Nothing has come to our attention during the period under review to suggest that we need to do any more work
in line with our duties under the Company Directors’ Disqualification Act 1986 and Statement of Insolvency
Practice No.2.
Our receipts and payments account We set out in Appendix A an account of our receipts and payments in the liquidation from 18 November 2016
to 24 September 2017, and for the liquidation in total.
Our expenses We set out in Appendix B a statement of the expenses we’ve incurred in the period since our last report.
Our fees We set out in Appendix C an update on our remuneration which covers our fees, disbursements and other
related matters in this case.
Progress since we last reported
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What we still need to do The winding up of the Company is now complete. Following the end of the period within which creditors may
object to our release, we will send a copy of this final account to the Registrar of Companies with a statement of
whether any creditors of the Company objected. We will vacate office on sending the copy report and
statement.
If you’ve got any questions, please get in touch with Lee Panther on 0113 289 4804.
Yours faithfully
David Kelly
Joint liquidator
David James Kelly, Toby Scott Underwood and Ian David Green have been appointed as joint liquidators of HCL Realisations 2013 Ltd.
David James Kelly, Toby Scott Underwood and Ian David Green are all licensed in the United Kingdom to act as insolvency practitioners
by the Institute of Chartered Accountants in England and Wales.
The joint liquidators are bound by the Insolvency Code of Ethics which can be found at:
Total for the period 4.50 1.00 3.75 14.10 59.55 33.01 1.85 117.76 29,747.40 252.61
Brought forward at 17 November 2016 537.34 114,450.55
Total 655.10 144,197.95
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Our time charging policy and hourly rates We and our team charge our time for the work we need to do in the liquidation. We delegate tasks to suitable
grades of staff, taking into account their experience and any specialist knowledge that is needed and we
supervise them properly to maximise the cost effectiveness of the work done. Anything complex or important
matters of exceptional responsibility are handled by our senior staff or the Liquidators.
All of our staff who work on the liquidation (including our cashiers, support and secretarial staff) charge time
directly to the case and are included in any analysis of time charged. Each grade of staff has an hourly charge
out rate which is reviewed from time to time. For the avoidance of doubt, work carried out by our cashiers,
support and secretarial staff is charged on a time costs basis and is included in the analysis of hourly rates
charged by partners or other staff members. Time is charged in three minute units. The minimum time
chargeable is three minutes (i.e. 0.05 units). We don’t charge general or overhead costs.
We set out below the maximum charge-out rates per hour for the grades of our staff who already or who are
likely to work on the liquidation.
We call on colleagues in our Tax, VAT, Real Estate and Pensions departments where we need their expert
advice. Their specialist charge-out rates vary but the following are the maximum rates by grade per hour.
Grade Insolvency Staff Specialist Staff
Maximum charge
out rates
(£)
Up to 30 June 2017
(£)
From 1 July 2017
(£)
Partner 600 620 1,315
Director 500 525 1,210
Senior manager 435 450 1,230
Manager 345 355 735
Senior associate – qualified 260 268 545
Senior associate – unqualified 190 196 -
Associate 170 175 270
Support staff 89 92 160
In common with many professional firms, our scale rates may rise to cover annual inflationary cost increases.
Payments to associates We have made no payments to associates in the period covered by this report.
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Our work in the period since our last report Earlier in this section we have included an analysis of the time spent in the period by the various grades of staff.
Whilst this is not an exhaustive list, in the following table we provide more detail on the key areas of work:-
Area of work Work undertaken
Why the work was necessary; and any
financial benefit the work provided to
creditors
Accounting and treasury
Management of funds held through
bank reconciliations, payments,
receipts and journals;
Payment of the unsecured distribution;
and
Arranging closure of the Company’s
banking facilities.
To enable the proper functioning of the
Company’s post-administration bank
account.
To enable the proper management of
administration
To distribute funds to creditors
Closure procedures
Completing review of case in advance of
closure; and
Liaising with agents and lawyers to ensure
no outstanding costs.
To ensure all statutory and regulatory
tasks have been completed in advance of
dissolving the Company.
To ensure there are no outstanding
liabilities of the Company before
dissolution.
Creditors
Responding to creditor enquiries;
Preparing and sending correspondence to
creditors in relation to their unsecured
distribution; and
Dealing with unsecured distribution
matters such as uncashed cheques.
To keep creditors informed of the
progress of the administration;
Statutory requirement under insolvency
legislation to formally declare the
dividend to creditors.
To assist creditors in receiving their
unsecured distribution payment.
Statutory and compliance
Preparing and circulating our second
report;
Preparing final report;
Liaising with UK Companies House and
filing notices where appropriate;
Liaising with Jersey Registry and filing
notices where appropriate;
Maintaining internal job management
systems; and
Dealing with correspondence received.
Statutory requirement under insolvency
legislation to prepare and circulate
reports to all creditors and Companies
House.
Requirement under insolvency
legislation to keep appropriate case
records to enable the effective operation
of the administration (as per best
practise).
Strategy & Planning Periodic review of the case by
appointment-takers; and
Team strategy calls and discussions.
Regulatory requirement for the purpose
of ensuring adequate progression and
supervision of the case.
Tax Chasing and obtaining formal tax
clearance from HMRC
To ensure all tax requirements and
liabilities have been fulfilled before
closure
VAT Submission of final VAT 426 to reclaim
VAT refund from HMRC
To reclaim VAT paid on costs incurred.
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Disbursements We don’t need to get approval to draw expenses or disbursements unless they are for shared or allocated
services provided by our own firm, including room hire, document storage, photocopying, communication
facilities. These types of expenses are called “Category 2” disbursements and they must be directly incurred on
the case, subject to a reasonable method of calculation and allocation and approved by the same party who
approves our fees.
Our expenses policy allows for all properly incurred expenses to be recharged to the liquidation and has been
approved by the secured creditor where required.
No disbursements arose in the period of this report.
Category Policy
Costs incurred
(£)
2 Photocopying - at 5 pence per sheet copied, only charged for circulars to creditors
and other bulk copying. -
2 Mileage - At a maximum of 71 pence per mile (up to 2,000cc) or 93 pence per mile
(over 2,000cc) -
1 Analyse all other disbursements reimbursed at cost -
Total -
Our relationships We have no business or personal relationships with the parties who approve our fees or who provide services to
the liquidation where the relationship could give rise to a conflict of interest.
Details of subcontracted work No work has been subcontracted in the period.
Legal and other professional firms We instructed the following professionals on this case:
Service provided
Name of firm /
organisation
Reason selected Basis of fees
Legal services, including:
appointment related matters;
advice on ROT claims; and
sale of business contracts.
Dentons LLP Expertise Time costs
Jersey company secretary role Verite Trust Company Ltd Company’s pre-appointment