Creditors
Creditors FAQs
What type of creditor am I?
Creditors are classified as to the type of claim they have, and these types will determine the quantum of distribution they will receive as the funds for each type are ring fenced.
The three main types of creditor are:
• Secured;
• Preferential; and
• Unsecured
Secured creditors have security registered at Companies House.
When they have a fixed/standard charge over an asset, the secured creditor will be paid out of the realisations from that specific asset, after the costs of realisation have been deducted.
When they have a floating charge over an asset, the secured creditor will be paid out of the realisations from those assets, after the costs of realisation and other expenses of the insolvency procedure, the preferential creditors (see below) have been paid in full and the prescribed part (see below) has been set aside.
Preferential creditors primarily consist of employees for arrears of wages, accrued holiday pay, unpaid contributions to occupational pension schemes and state scheme premiums, all within certain limits. As of December 2020 this also includes certain aspects of HMRC’s claim, and such claims will rank as secondary preferential claims (paid after the preferential element of the Team Members claims) and consist of the VAT, PAYE and NIC deductions. Preferential creditors rank ahead of all other creditors when realisations are achieved from assets where there is no fixed charge registered.
Unsecured creditors are all other unsecured and non-preferential creditors (with the exception of shareholders/members). These are usually the normal “trade” creditors. They rank below preferential and secured creditors, with the exception of when the prescribed part is applicable, which in this instance doesn’t apply..
Shareholders / members will be the last class of creditor to receive a distribution and they will only receive a distribution after everyone else has been paid in full.
I am owed money; what further information will I receive?
The Joint Administrators will write to all known creditors of the Company (per the creditor list obtained from the Company’s books and records) to formally notify them of the administration appointment. This will be accompanied by a general website notice informing creditors that most future documents for creditors will be posted to a website rather than being delivered by post.
The Joint Administrators will produce a report to all known creditors and members within eight weeks of the appointment. This report is known as the Joint Administrators’ proposals and will outline steps taken by the Joint Administrators to date and the strategy going forwards. This report will be delivered via upload to the website following the issue of the website notice with the initial creditors letter.
The Joint Administrators are also required to provide a written update on the administrations to all known creditors every 6 months. This report will be published on the website within one month of every 6 month anniversary or earlier if an Administrator vacates office or an extension to the administration is granted.
Our appointment means that you can’t start or continue legal action, enforce security or repossess any goods held by the Company unless we agree or the court allows it. You can find information on administrators’ fees and your rights at:
Opting Out
Creditors have the right to elect to opt out of receiving certain documents about insolvency proceedings. Any election to opt out will not affect a creditor’s entitlement to receive dividends, should any be paid to creditors. The right to opt out only applies to documents required by the Insolvency Act 1986 or the Insolvency (England and Wales) Rules 2016 to be delivered to creditors generally or to a particular class of creditors. It does not apply to documents or correspondence sent to people in a capacity other than as creditor (e.g. as an employee) or to correspondence sent to individual creditors. Any formal opt out request should be sent to uk_insolvencydocsrequests@pwc.com or PwC, Central Square, 29 Wellington Street, Leeds LS1 4DL clearly marked up as in relation to The Floor Room Limited- in administration
What is the estimated timeframe for reviewing my claim and paying a dividend?
The administration process is complex and it takes time to assess the Company’s position and provide an estimate of the value or timing for reviewing claims and making a distribution. The officeholders will include an update of dividend prospects and, if possible, a timeframe in their proposals and reports.
At this time we do not anticipate any dividends will be paid to unsecured creditors.
Will you refund the costs incurred in preparing a claim?
We are unable to refund the costs in preparing a claim. Consequently, we cannot refund any expenses incurred in obtaining information necessary to make a claim.
How to submit a claim
Our preferred method for creditors to submit claims and supporting documents is via the Turnkey (IPS) online portal, as this is the most efficient and cost effective way for us to deal with your claim and also allows you to better track its status, so we recommend the use of the online portal for claim submission.Your unique login details will be sent to you separately and within 1 month of appointment. If you have any issues with the portal, see the guidance here.
Directors’ conduct
One of our duties is to look at the actions of anybody who has been a director of the Company in the three years before our appointment. We also have to decide whether any action should be taken against anyone to recover or contribute to the Company’s assets. If you think there is something we should know about, please write to us at uk_thefloorroom_creditors@pwc.com
This is part of our normal work and doesn’t necessarily imply any criticism of the directors’ actions.
If your query has not been answered by the above, please email uk_thefloorroom_creditors@pwc.com
