A note sent by Malcolm Kilminster through insolvency practitioner B N Jackson Norton on June 6, and seen by Money Marketing, invites creditors to their offices at 143 Orchard Street Bristol at 11.30 on July 16.
The meeting will hear a statement of the company’s affairs for the purpose of nominating a liquidator and of appointing a liquidation committee.
The move for liquidation is likely to prove controversial among KFM creditors and shareholders many of whom claim they are owed large sums of trail commission.
Minority shareholders attacked KFM in January over a deal in which the network’s advisers were offered the chance to transfer to financial planning network Alpha to Omega. The majority of the KFM’s 30 advisers made the move.
Under the terms of the deal, Malcolm Kilminster’s own practice became an appointed rep of A2O.
As part of this deal residual income, including trail commission, from KFM would pass to Malcolm’s own practice if KFM ceased trading.
Documents from a KFM EGM earlier this year show the network was facing two potential litigations totalling around £300,000. If liquidation does occur, responsibility for these claims could fall upon the Financial Services Compensation Scheme if they are successful.
At the time a spokesman for Malcolm Kilminster said that Kilminster Financial Management would continue to trade and to benefit from the trail commission due to the company.
The spokesman also said that there was ongoing litigation between KFM’s minority shareholders and the firm.
Malcolm Kilminster was understood at the time to have received £265,000 up front for selling the “goodwill” in his own practice with a further £50,000 in six months, and another £50,000 in twelve months.
Kilminster was unavailable for comment when Money Marketing rang his office this morning. A member of staff said he is on a five week holiday in America which began this week.