My IVA proposal has gone out to creditors, only two have responded, effectively rejecting the proposal. These represent between 23 - 27% of the overall debt. My advisors are saying that the IVA proposal has failed because 100% of the proxy votes have rejected. I thought a non response equated to an acceptance. Can you please advise. Thank you
Unfortunately a non-response is not the same as an acceptance, so your advisors were right. Did they tell you why your two creditors rejected the proposal? Can you go back and re-propose it?
Liam, thank you for the reply. Our Proposal is quite unique in the sense that we are offering a settlement from the proceeds of a legal claim. I can understand the creditors not liking it. Our only other option is bankruptcy, but of course it is quite expensive when you have nothing!
Kind regards
Dean
In order for your IVA to be approved 75% of the creditors’ who vote need to accept (it is 75% of the debt value not the number of creditors). Have you been advised the reason for the rejection as it is possible negotiate with them.
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Was it a legal claim against a creditor? If not then I'm sure there's room to negotiate. What did you advisor say about it- did they suggest re-proposing?
Hi Liam, The creditors meeting is tomorrow, so i will suggest that we try and re-negotiate. It is quite complicated in the sense that the legal claim is via our company which is in liquidation. The administrator is pursuing the claim and as the biggest creditor (£500,000) we would get a substantial dividend. It is part of this dividend that we are offering to our personal creditors. Unfortunately because of the uniqueness the creditors representatives are not giving it the necessary thought. My wife and I have had a torrid five years so bankruptcy is quite attractive, especially since we have nothing. We sold our house a few years ago hence the large Directors loan in the business. The Irony is that the financial institutes that are pursuing us today are the ones that caused the collapse of our business. We were selling capital goods! Thank you for your advice, Kind regards Dean
I assume that the Administrator's claim is disputed by the creditor concerned? Has the Adminstrator given any indication of the dividend payable to you in the event that the claim succeeds?
I don't see that your case is unique at all? The outcome is uncertain, but it is the same in bankrupcy, so creditors are hardly being prejudiced by supporting your IVA. Did your IP include a statement from the company's Administrator with regard to the potential success of the action?
