Do you have a Wrapit wedding list? Ways to minimise your loss. (Merged Thread)

Horace

I note from reading Facebook that a website has been set up for those hit by the WrapIt fiasco.

http://www.wrapitcustomers.com/content/frequently-asked-questions-faq

The site is currently a work in progress, however the FAQ page makes for interesting reading because there is a lawyer who is a victim and is also looking at bringing a case against WrapIt. Apparently, this type of law is his speciality as he and his colleagues are also looking at the Farepak fiasco too.

I have posted details of the website here so that people can visit the site and add their comments and maybe work with others in the same situation to bring the situation to a satisfactory conclusion.

skintchick

I believe HSBC are owed money by WrapIt and that is why they have ringfenced it.

HMiller

As I understand it, the rationale of a limited company is to protect the shareholders from any liability beyond their share capital. In the absence of any special circumstances (such as fraud etc) directors are not liable for any debts of the company.

WrapIt's advisers, KPMG, are very competent and well known for handling administrations and corporate insolvencies. They are, of course, very expensive but most creditors will see it as money well spent.

Judging by the comments on this board, WrapIt have been heading into financial difficulties for a while. Certainly, failing to deliver goods when their suppliers have them to hand was fairly textbook evidence of trading difficulties.

It has been suggested that the directors may have behaved fraudulently or traded wrongfully. It is not incumbent upon directors or employees to disclose the fact that the company may be facing financial difficulties; this would be fatal to many commercial enterprises. It is generally sensible for a company to try and trade out of a downturn where the directors reasonably feel this is possible.

This is not to say the directors have behaved correctly - simply that there must be credible evidence to show fraud before it is alleged. Whilst involving the SFO and so on may result in a slap on the wrist for the directors, it is unlikely to recover a great deal of money for your guests.

The core of the issue appears to be that WrapIt have in some way fallen out with HSBC. This could be anything from breaching the terms of the overdraft, falling to make loan repayments, breaching the terms of a debenture. It would be pointless to speculate in any real detail. It is most likely, however, that HSBC will have a right to appoint an adminstrator if they feel it is appropriate.

So what happens on an administration? KMPG will move in and effectively replace the directors. They will try and keep the company trading. Failing this, they will try to get the best possible return for the creditors as a whole.

During this period, you will be unable to commence or continue legal proceedings against WrapIt. This includes any claims you have issued using Money Claim Online or required your local county court to seal and serve.

If KPMG are appointed as administrators, they will have 8 weeks to send out a pack explaining what they hope to achieve and how long it will take. Again, anything before this will be pure speculation.

In theory, therefore, an administration is not the end of the world. It ought to realise something for your guests as part of the body of creditors. It is not guaranteed and KPMG and their advisors will certainly pay themselves before you see a bean!

What are the alternatives? Hopefully, with KPMG’s assistance, WrapIt will resolve its difficulties and you will receive your gifts after a rather disappointing delay. The current commercial climate is very tight so these things do happen from time to time. It is very stressful for everyone involved, particularly during a time where you should be enjoying the fruits of all the work that went into the wedding itself.

Unfortunately, sometimes it is impossible for the administrator to save the business. In these circumstances, the company will normally go into liquidation and be wound up. This is generally bad news. The secured creditors (doubtless HSBC) will dash in and claim their security – buildings, leases, cars, goods etc. The liquidator will sell what is left and pay the preferential creditors – employees, the tax man and a few others. If there is anything left, the liquidator will then pay himself. Finally, if there is anything still in the pot, your guests will get a percentage based on the amount they are owed. This is quite often very little – few liquidations result in unsecured creditors recovering much of their money.

What should you and your guests do now? In my view, there is little you can achieve at this stage other than create (expensive) trouble for WrapIt and their advisors – particularly by involving the SFO etc. It may be sensible to write to them setting out the goods you have ordered and asking them to confirm that they are holding your goods. There is always an argument that these are already your goods and will not form part of any administration or liquidation – WrapIt are simply holding onto them on your behalves.

If they do enter administration or liquidation, it will be worthwhile forming a group and seeking legal advice. For the time being, it’s simply a matter of crossing fingers and toes!

Horace

There is a site that I found on Facebook as mentioned above which has been set up by a lawyer who has found WrapIt wanting when it came to his own wedding, he is asking people to join in for global action against the company as opposed to people taking them on individually.

deb_buffy

Hi

Just seen this on the bbc new website
http://news.bbc.co.uk/1/hi/business/7540758.stm
looks like they have gone into administration now. News report says they owe £3.5 mil to hsbc and in the 6 years of trading never made a profit!

I hope anyone who used them is able to get their money back and i feel sorry for the couples who will be losing out because of this.

Deb

BarrackRoomLaywer

Someone mentioned earlier that the Administrators, join the queue after preferred creditors. Clearly if this was the case none of them would be interested in the business, would they. ;-)

The facts are that Administrators/liquidators, come before preferred creditors. i.e. they get paid FIRST..........

paddingtondoo

Wrapit's problems have been on GMTV this morning and they are asking people to get in touch.

albionrovers

Does anyone know the general rules about direct debit code of conduct?

I spoke to my bank yesterday about my missing £149 direct debit Paypal payment to Wrapit and he hinted that I may be covered if I go into my local branch and explain the circumstances. He quoted that there is a protected direct debit code of conduct in existence and my transaction falls into this category ie not credit card, not Visa debit card, not Maestro.

All comments welcome, thanks.

MSE_Martin

Hi folks,

I originally added my note to the top of this to go in the weekly e-mail, then i decided that as some of these posts were pre administration it would be confusing for people so i've started a new post and closed this down

hopet hat's ok

New Wrapit Crisis: How to get money back thread.