The Bankruptcy Advisor Which Became Insolvent!
In a move which is as weird as it is surprising, Debt Advisor Ltd, which advises clients who are in financial trouble, itself became insolvent last Friday. The company had grown by acquisition over the last few years and while it led the sector higher on the back of the financial woes of the UK population, it has itself suffered major financial difficulties of late.
The company has actually been bought at a rock bottom price of £750,000 by a director who recently sold his own business to the company, for £2 million (split between cash and shares in the Stock Market listed advisor). The sale was handled by PricewaterhouseCoopers (PwC) and while it may cause some negative comments in the financial world, it was all above board and correct.
The catalyst for a major reversal of the sector’s fortunes seems to have been some rather negative press comment a couple of months ago, which highlighted that much of the work for which these companies charge thousands of pounds, can actually been done by the client themselves. There was also a move by the financial sector to limit the massive payments which these advisors received, often resulting in creditors only receiving pennies for each pound of debt.
While the financial woes of the country continue, it will be interesting to see if the debt advisory agents can make a come back - or have they lost the public’s trust forever?
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