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Collapsed British Steel IFA Active Wealth wind-up fees near £56k

The administrative cost of winding up collapsed British Steel IFA Active Wealth has come to £55,765 according to an update on Companies House.

In February 2018 Active Wealth went into liquidation and attracted attention for its role in advising members to transfer out of their final salary schemes at British Steel.

The update from liquidator Crossfields sheds light on how Active Wealth has been wound-up over the past year.

It gives a detailed breakdown of matters Crossfields had to deal with that were not originally anticipated in the wind-up that explains the high costs.

This includes the “handling of numerous emails and telephone calls received from journalists, enquiring about the liquidation of Active Wealth and consequences for British Steel Workers’ pensions”.

It also includes “dealing with various complaints from clients received via email, correspondence and telephone calls, and suggesting they contact the Financial Services Compensation Scheme directly for any compensation they may be entitled to.”

Costs for winding-up collapsed firms can be high and in June 2018 Money Marketing reported Kingston Smith estimated it could take 375 hours and cost more than £280,000 to handle nearly £56m of compensation claims against collapsed Sipp firm Lifetime Sipp Company.

In the document Crossfields also says it has referred Darren Reynolds, the former director of Active Wealth, to the government in a report.

Crossfields liquidator Tina Bullock says: “Some of the work the liquidator was required to undertake was to comply with legislation such as the Company Directors’ Disqualification Act 1986 (CDDA) and the Statement of Insolvency Practice.

“My report on the conduct of the Directors of the Company to the Department for Business, Energy and Industrial Strategy under the CDDA 1986 was submitted in accordance of statutory timescales and is confidential.”

According government guidance on the CDDA 1986, when a company has entered into formal insolvency proceedings, the official liquidator or administrator must submit to the secretary of state a report on the conduct of all directors who were in office during the last three years of the company’s trading.

The Insolvency Service acting on behalf of the secretary of state, receives these reports and must decide whether it is in the public interest to investigate further and, ultimately, whether to seek a disqualification order.

Darren Reynolds declined to comment.

In January the FSCS said it will change the way claims against British Steel IFA Active Wealth will be calculated for reasons of fairness.

The lifeboat fund said the change is to ensure full and fair compensation for former members of the British Steel Pension Scheme.

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  1. If Mr Reynolds is not banned for life, then we know the entire system is broken beyond repair.

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