HELP - Compass Debt Counsellors - CREDITORS MEETING 30th March in Leicester

A detailed account of the meeting here;

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Am I OK to post the interim update from 11th October here? It's about 2 pages of A4…

To All Known Creditors

Dear Sir/Madam,
As you will be aware, Alan Simon of this office was appointed as liquidator of the above referenced
company on 30 March 2016. Since the appointment we have endeavoured to address the
voluminous correspondence received from clients of the business, both via email and post, in a
timely manner. Whilst I appreciate that the circumstances of the company's demise has left many
questions I would assure you that my staff and I are diligently investigating the company's affairs and
indeed the conduct of the directors.

Creditors are advised that my statutory reporting obligations are set out in rule 4.49c of the of the
Insolvency rules 1986 as follows:
"{2} The prescribed period for which the liquidator must produce a progress report, except
when the liquidator ceases to act, is the period of 1 year commencing on the date on which
the liquidator is appointed and every subsequent period of 1 year"

Notwithstanding the above, given the nature of recent correspondence received from clients and
creditors I have prepared this email to provide a brief synopsis regarding the progress of my
investigations. You must however appreciate that given the complexity of this matter I am limited in
the information I am able to provide as it could prejudice potential claims and actions I have
identified.

Client Account Data
You will recall from the information provided at the meeting of creditors held on 30 March 2016 the
company migrated to a cloud based server in June 2014. All client data including individual account
details {such as details of contributions and payments made to the clients' creditors) were included
in the migration.

Upon my appointment I immediately entered into correspondence with the provider who facilitated
and hosted the cloud. However, despite my efforts to recover the data, it transpired that it had
been deleted in its entirety on 2 March 2016 following the failure of the company's monthly direct
debit payment which was due on 29 February 2016. It further came to light that there was no back
up of the data.

The provider argued that the company was in breach of its contractual obligations and accordingly
their actions were justifiable given the circumstance.

Regrettably, despite seeking legal opinion on this matter, it has become apparent that given the
paucity of funds in the estate it would be very difficult to pursue any action in this regard. In the
circumstances I have no option other than to accept the position.

Given the above creditors will appreciate that we are unable to address enquiries about individual
client accounts as we simply do not hold sufficient information from the company records in our
possession.


Client Funds
Following confirmation of my appointment I provided the company's bank with instructions to
forward all credit balances for the benefit of the liquidation estate.
I am pleased to advise that the sum of £24,365.38 has been recovered representing the balance held
in the client account. These funds are currently held by my practice in a separate designated account
These funds would ordinarily be distributed on a pari passu basis to clients however to provide a
perspective, I would confirm that to date I am in receipt of claims in excess of £4 million from 761
individual creditors. The costs of adjudicating each individual claim and distributing the funds would
prove to be prohibitive and therefore I am currently seeking direction from the FCA
(Financial Conduct Authority) and legal opinion on how best to deal with these funds.


Corporation Tax
My team and I have diligently reviewed the company's available financial records and have identified
a potential Corporation Tax refund. Accordingly, I have instructed accountants to deal with the
preparation and submission of the relevant documentation to HM Revenue & Customs.
This matter is currently ongoing therefore I am not able to provide any further information at this
stage as it could prejudice my enquires. Further details will be provided in the 12 month report
referred to previously.


Potential Claims
During the course of my investigations I have identified several potential claims against the directors
which I am currently pursuing. Again I am unable to provide specific information about these claims
at this juncture as it could prejudice the outcome. I would however advise that I have instructed
solicitors to assist me in relation to the recovery action against the directors.

It should be noted that both the accountants assisting with the Corporation Tax matters referenced
above and the solicitors have been retained on a contingent fee basis, which means they will be paid
if and when there are sufficient realisations from any source.

Whilst I can appreciate that many of you have suffered substantial financial losses as a result of the
company's failure leaving many unanswered questions, I would ask that you consider the contents of
this synopsis and remain assured that we are making every endeavour to find the answers for
you. Having said that I would reiterate that given the complexity of the investigation and the time
and resources already expended on this matter, historically cases of this nature can be protracted
and therefore, I cannot at this stage state with any certainty, when the matters alluded to above,
shall be concluded.

In closing I would remind you that all creditors shall receive a formal progress report dealing with
the first 12 months of the liquidation by the end of May 2017.