Reflecting upon 2020, one cannot deny that we have all faced interesting challenges and, as a licensed insolvency practitioner, much of my work has involved dealing with the failure of businesses in the hospitality, leisure and retail sectors, and one suspects that these will continue to experience difficulty in 2021. In fairness, over the last ten years, quite a number of bars, restaurants, hotels and leisure outlets have passed through my hands which perhaps reflects the precarious nature of commercial life for these sectors.
The oil and gas industry has provided a large number of insolvency appointments and it is a fairly familiar exercise to deal with a one-man personal service company which has an overdrawn loan account and hence, difficult discussions ensue with a director about how much is to be repaid. Typically, this involves the potential spectre of bankruptcy and having to refinance the family home in order to keep the liquidator at bay. Lots of delicate conversations required !
It is impossible to forecast the size, type and variety of business that will fail next and this tends to mean that a key skill of the licensed insolvency practitioner is to know which agency/department to contact in terms of helping to identify/protect/realise assets whilst communicating the bad news to a group of angry creditors. Assets that I have sold include motor bikes, cars, all types of clothing, patents, intellectual property rights, livestock, oil tools, property, land, and perhaps the most unusually a collection of pornography. As it happened, the pornography was linked to a well known adult movie company which also went bust (pardon the pun) and denied electronic access to the collection thereby stopping a sale.
A few years ago I was appointed liquidator of a pig farm. On the first day of my appointment a boar was delivered. After a brief period of rest following the journey, the boar was led into the breeding arena whereby it immediately commenced work………..only to suffer a major heart attack during its first conquest. Fortunately the supplier accepted my view that the goods were not fit for purpose and provided a full credit in exchange for a dead boar !
Having to deal with the sad task of dismissing employees is a frequent occurrence. In one such situation at a fish factory in Peterhead I spoke to about 40 people and explained why the company had been liquidated and hence their jobs were no longer required. At the end of my address I asked if there were any questions, only to be advised by the foreman that everybody had been standing quietly because I wore a suit and tie, but nobody understood a word because they were all Russian.
On another occasion I had to address about 90 employees the day after they had been dismissed and explain their employment entitlements. Unfortunately, the appointment had been arranged for 2.30 pm in a working man’s club in the centre of Aberdeen and, to my dismay, the podium was at the far end of the room. Trying to explain why no cash would be paid for many weeks was an unpopular topic and resulted in me weaving past tables of angry and intoxicated former employees as I beat a hasty retreat, leaving a representative from the department of employment to close the meeting.
On the subject of redundancy, one of the forms asks if there have been any breaks in employment. This is designed to deal with any individual who has left an employer for a year or so, but then returns. In one case a former employee had written in the narrative box for employment breaks “10 am to 10.15 am daily for tea”. Cue a mental note for me to advise all employees thereafter that a cup of tea does not constitute an employment break.
Life can be challenging. It is not that long ago that a person claimed to be a member of a secret sect and placed a curse on me. In another case, I received a telephone call from a concerned director advising me not to travel to his business the day after I had closed it because a former employee, worse for consuming alcohol, was walking up and down outside the main gate with a knife in his hand.
I recall vividly the time when I sought to close a business one evening and found myself accused of assault : which seemed bizarre because I was the only Meston Reid & Co representative and there were 2 directors and 12 employees. Nevertheless, Grampian’s finest thought it appropriate to confine me to a cell for a few hours and helpfully advised the local newspaper. Fortunately, all was well after a detailed investigation had been undertaken and I received a most fulsome written apology from the Chief Constable.
Of course, the vast majority of time tends to be spent at one’s desk looking at accounting records and dealing with statutory filing requirements, but it is always fun when there are some unusual circumstances that help produce a sense of colour and excitement to the daily routine.
The views in this article are those of Michael J M Reid, licensed insolvency practitioner and partner of Meston Reid & Co, chartered accountants, Aberdeen. They do not purport to represent those of the firm in general.