Eric is a licensed insolvency practitioner regulated and licensed by the Insolvency Practitioners Association. His ethos is always "give the right advice, choose the right options, rescue first if possible." He has many years’ experience in accounting and insolvency having worked at Touche Ross (Deloitte) and has been involved in turnaround and insolvency since the late 80's.
Keith and Eric first met in a pub in Darlington in 2000(!) and have worked closely ever since, with Eric as a partner in Marlor Walls and now a director of KSA Group.
Eric has acted as nominee and supervisor of over 350 CVAs in that time and knows the pressures and difficulties of that approach on all parties involved in making the effort for a successful rescue of the business.
From smaller “family owned” companies, to businesses with a turnover exceeding £20 million, a CVA can prove an invaluable rescue package, securing not only a better return for creditors than might otherwise be generated, but also allowing the business to survive and to continue to work with its trusted suppliers.
A statement of affairs (SOFA) is a structured document which provides important information on the assets and liabilities a company has at a given moment in time.
This document tends to be produced when a company is facing insolvency and the creditors need to know the position of the company. The SOFA will give an indication of what money is available to pay back creditors. An insolvency practitioner or turnaround professional will put together the document with the help of the directors.
This document is typically used in the following insolvency procedures:
If the company is to go into voluntary liquidation, the financial position will be outlined at a creditors meeting. When the case is administration, directors are expected to produce the document within 14 days to be included in the administrator’s proposals.
In a CVA, the SOFA is also a section of the proposals to creditors. However, in the case of compulsory liquidation, the appointed IP has the responsibility of preparing the statement of affairs.
Full details, precise dates and amounts requested are to be included regarding:
The figures here are expected to be reliable, though there are not any requirements for evidence of the figures presented. The main aim of this document is to identify the affected creditors and those the debtor would like to include in the insolvency process. Due to some creditors applying interest and penalties to the balance on the claims, there is some difference allowed between figures on the SOFA and what the creditor submits.
Once the SOFA is complete, it is to be filed at Companies House by the appointed Insolvency Practitioner, so that it is available for public view. It is used as a source of information for company creditors and shareholders as well as potential buyers of the insolvent company.
Creditors are given the document and have the opportunity to submit any changes to the amount of debt owed, hence confirm or deny the accuracy of the figures. Dependent on the type of insolvency process the debtor is seeking, the IP and court are left to determine which assets will be sold and how the proceeds will be divided among creditors.
Usually, debtors undergoing this process are given a specific period to prepare a SOFA within and submit to the receiver of the court. Failing in doing this results in the court declaring the debtor in contempt and setting back the bankruptcy progress considerably. Unless there is a reasonable excuse for the failure of submission, the nominated person is liable for a one-off fine of £5,000 or a daily default fine of £500, which is set by the court.
No. A balance sheet is a part of financial statement and so must be accurate, current and show the exact position of the company’s finances. This contrasts to the SOFA which provides information on assets and liabilities but with estimated figures which are available at the time of making.
For more information, call us today on 0800 970 0539. Us at KSA Group, can advise you on understanding and creating this document as well as assisting creditors with reviewing and reacting to the documented figures.
