Phones 4U Creditor Factsheet
Atradius have released a factsheet for creditors of Phones 4U, the information is useful even if you do not hold a credit insurance policy with us.
If you would like any further information please contact us directly.
PHONES 4 U - Creditor Factsheet
You will be aware of the fact that Phones 4 U has sought to appoint PWC as Administrators of the company following the decision that they reportedly have little alternative but to cease trading as the result of the news that the network operators will not be renewing their contracts in 2015.
At the time of this publication there is no formal appointment, the matter is with the Court for approval, however it is anticipated that PWC will take office by the end of business on 15th September 2014.
At the present time all retail outlets are closed, and the website has been amended to provide information to customers. Given the short notice of the administration we understand that PWC will need a short time to formulate their strategy for the company, and as such there is presently little information available for suppliers.
Atradius is in the process of assessing its exposure, and will make direct contact with any client with a credit limit.
Claims on Atradius
If you believe that you have a valid credit insurance claim upon Atradius, we would ask you to notify us immediately by lodging a notification of non payment.
We provide below some general guidance in relation to Administrations which may be useful in the near future.
Administration process
Creditors of the company can expect to receive a formal notification of the appointment of the Administrator. The Administration process will normally run for 12 months. At this point the company is likely to pass into Creditors Voluntary Liquidation; this is a frequently used vehicle for the distribution of dividends. (There are other options to exit Administration, but Creditors Voluntary Liquidation is the most regularly used) The Administration process can be extended, however the Administrator would need to apply to the Court for approval to do so.
At approximately 8 -10 weeks from the appointment the Administrator will call a creditors meeting:
Creditors will be invited to attend and be asked to complete and return a proxy form and a proof of debt.
The Administrator will set out proposals for handling the Administration of the company, indicate if possible the prospects for dividends for the various classes of creditors, there is often an indication how the process will be finalised beyond the 12 month timeline.
Trade suppliers to the company are likely to rank as unsecured, only those who may have obtained and registered a formal security would benefit from an improved ranking. If the Company can be sold and a new trading entity is established the Administration and Liquidation process for the old company will continue to a conclusion. (There is often a change of name for the old company)
Actions for creditors of the company
1. If you hold Retention of Title (ROT) it will be important to notify the Administrator of this fact.
2. It is expected that the Administrator will use stock lists taken at the time of their appointment to determine the level of goods held per supplier, with the large number of retail outlets any physical stock inspection would prove to be a logistical problem. In the event that the administrators do not have up to date stock lists for your agreement and signature of approval at the time of their appointment, you should request immediate access to premises to take your own stock inventories.
3. We understand there will be a designated team dealing with ROT issues and you should make contact with them as soon as details are announced.
4. Assuming that you hold ROT, you will need to supply evidence of this within your terms and conditions of sale, and to demonstrate that this has been incorporated into the sale process.
5. It is usual for the Administrators to refer ROT claims to their own legal advisors for comment, and this means that it can take a short while to process such claims.
6. If your ROT is accepted the Administrator should pay full invoice price for any goods sold since their appointment. (The Administrator may ask you to raise new invoices to accommodate any payment)
7. If your ROT is rejected and you feel this is not justified, we recommend that you take legal advice before responding to the Administrator.
8. Atradius can provide the name of a solicitor if you need assistance, please ask your account manager to arrange this for you.
New supplies
1. Should the Administrator continue to trade the company you may be asked to supply new stock.
2. Such orders will always come from and be signed by the Administrator's designated team.
3. Anticipate that the Administrator will seek credit terms.
4. We consider that trade with the Administrator is safe; and would not anticipate that a default on payment would occur.
5. Where possible, we recommend that you have agreement on your ROT before you continue to supply new goods.