CAPA has seen a rise in recoveries from audits on companies that opted for a members voluntary liquidation (MVL), as well as firms in a creditors voluntary liquidation (CVL), during the past year.

When corporate restructuring firms are appointed as liquidators or administrators of insolvent businesses, CAPA’s Audit team assists them in recovering funds for creditors.

CAPA believes there are further opportunities to recover funds for creditors in cases where businesses have entered an MVL or a CVL, at a time where CVL numbers in particular remain comparatively high.

While administrations trend historically low due to prolonged government support, Insolvency Service figures show that of the corporate failures that are crystallising, the majority are CVLs.

The government agency’s Q1 figures show there were 2,384 company insolvencies between January and March. Of this total, 2,047 were CVLs.

Despite a tough environment for businesses trading through and out of a pandemic, recoveries for CAPA’s clients have continued to grow from the audits the team have undertaken on companies in either a CVL or MVL process.

The Audit team has had particular success during the past year across rates audits on firms in these liquidation processes, with the team recovering £160,000 for creditors – recoveries that might otherwise assumed to have been difficult or impossible.

During these audits, CAPA’s Audit team use bespoke software to conduct a forensic analysis of business rates costs paid across various sites by the liquidated businesses.

The team interrogates the data to uncover any anomalies or errors, before recovering any overpaid sums for creditors.

In such cases during the past year, CAPA has found that where incorrect payments have been made, recoveries are usually in excess of £1,000.

One example of where the team recovered large sums is Chung Ying Central Ltd, a Birmingham-based restaurant in a CVL, where £27,000 was paid on to creditors.

Another case was De Grisogono UK Ltd, a wholesale trader that entered a CVL, where CAPA retrieved £22,000.

CAPA has had other successes in recovering significant sums for creditors, where they’ve been instructed by firms such as Leonard Curtis Business Rescue and Recovery and Cornerstone, to conduct rates audits on businesses in a CVL.