Insolvency firm settles misconduct claim out of court

INSOLVENCY firm Begbies Traynor has settled out of court with a group of creditors following claims of misconduct. Huddersfield’s Clayton West Day Care nursery went into administration in November 2015, and Begbies were brought in by director Susan Walker to attempt to rescue the business via a corporate voluntary arrangement.

46 parents who were creditors of the nursery, having paid thousands of pounds in deposits, said they were not informed of the voluntary arrangement and were unaware of impending insolvency proceedings.

The claimants said that Begbies admitted that practitioners and partners at the York practice, Rob Sadler and David Broadbent did not behave “in accordance with the law when they intentionally withheld critical information from the deposit paying creditors.”

The parents’ group said that Mr Sadler and Mr Broadbent did not notify them of the proposed CVA, and they continued to pay for childcare throughout November.

The proposal, which was allegedly made on the basis that parents would continue to pay in advance, was rejected, and deposits made earlier were trapped.

Begbies paid 75% of the total claims concerning prepaid childcare made, though it is unclear how much the total remuneration was.

A spokesperson from Begbies Traynor said: “Begbies Traynor maintains that whilst a technical breach of the relevant insolvency legislation was accepted, this did not result in Begbies Traynor or its insolvency practitioners having a financial liability to the relevant parents.

“The settlement proposed by Begbies Traynor, and concluded with the relevant parents, was a goodwill gesture and was made without any legal liability.”

A spokesperson for the creditors added: “Whilst most of the affected parents joined in the collective action and have received 75% of their claim in out of court settlement, there are some parents whom we believe are affected but whom we have been unable to contact.

“Begbies have declined to confirm to us that those parents will be paid as well. To ensure they get the same justice we have achieved, if there are others who have been affected by the misconduct we urge them to come forward.”

Click here to sign up to receive our new South West business news...
Close