UK Bankruptcy Tzar On Verge Of Bankruptcy

Tyler Durden's picture


Despite around $135 million in bailouts, the UK government's Insolvency Service disputes its own insolvency. The FT reports that one British MP summed it up - "it is fair to say that if this was a company it would be in deep trouble." The group, which polices bankrupt companies, liquidates failed businesses and disqualifies unfit directors, would be bankrupt were it not for the government's cash injection. Dependent on fees and recoveries from bankrupt companies, the agency over-estimated its ability to recover assets from collapsed businesses. It dismisses the insolvency claims against itself however, noting the service is "living within its means" and expects to be deficit-free by 2015 (though it is unclear how unless they expect recoveries to rise dramatically or bankruptcies to increase significantly) as it is forced to provide services even when there is no prospect of recovering fees from bankrupt people or companies. Their rate of prosecution has dropped from 40% to 21% and even the creditor community has lost faith arguing that the agency's model was "unreliable in the current economic climate" and required urgent reform.

Via The FT,

The UK government’s Insolvency Service is all but insolvent.


Experts suggest the group, which polices bankrupt companies, liquidates failed businesses and disqualifies unfit directors, would be broke had it not received an emergency injection of cash from the government.




"It is fair to say that if this was a company it would be in deep trouble,” said Adrian Bailey, chair of the parliamentary business committee.


The Insolvency Service is dependent on fees and asset recoveries from bankrupt companies and the annual number of bankruptcies has fallen sharply over recent years. Official receivers dealt with 43,594 new cases in the 2011-12 fiscal year compared with 77,898 received in 2009-10.


The agency overestimated its ability to recover assets from collapsed businesses through its receivers, known as the Official Receivers.




The Insolvency Service said it was having to “live within its means” because of the drop in case numbers. It has merged its regional offices and cut its headcount by 500, with up to 400 more job cuts in the next three years. “With this strategy in place the service anticipates to be deficit-free by 2015,” it said.


While costs at the agency have been slashed by £60m since December 2009, it is hamstrung by its obligation to provide services even when there is no prospect of recovering fees from bankrupt people or companies.


The Insolvency Service disputes that it is “insolvent” given that it holds £14m of cash on its balance sheet. It has, however, required £89m of rescue cash from the business department (BIS) between 2008 and 2012.




“My concern is that the rate of prosecution, which was 40 per cent of those reported a decade ago, is now down to 21 per cent because the IS is under-resourced,” he said.


“The creditor community is upset because usually, if they don’t get their money back, at least they have the satisfaction that the person has been banned as a director for a number of years... that’s now less likely.”

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Wed, 03/13/2013 - 22:50 | 3328459 greased up deaf guy
greased up deaf guy's picture

bullish... cue bob pisani...

Wed, 03/13/2013 - 22:57 | 3328483 ACP
ACP's picture

Exactly. A double negative is a positive, right?

Is there no financial news that isn't just a fucking joke nowadays?

Next thing you know, they're going to be offering 3% down mortgages again...oh wait, oh shit!


Wed, 03/13/2013 - 23:29 | 3328566 WayBehind
WayBehind's picture

And who is not BK in this country? He is just practicing to gain more experience for his job.

Wed, 03/13/2013 - 23:52 | 3328608 SafelyGraze
SafelyGraze's picture

check out fdic asset sales

book value = 2 x appraised value (overall)

book value = 6 x appraised value (2011 nonperforming loans)

frankly, mark-to-market creates a much higher number than the actual market does

if only we could sell to someone who would pay book value rather than appraised (actual) value. but who would do *that*?

keep eating your vegetables!

Thu, 03/14/2013 - 00:15 | 3328664 knukles
knukles's picture

I don't understand the problem.
They'd be setting a bad example if profitable.

Insolvency Service.... see...

Thu, 03/14/2013 - 00:24 | 3328690 Pure Evil
Pure Evil's picture

The only profit a government program is supposed to make comes out of taxpayer pockets.

Thu, 03/14/2013 - 00:56 | 3328748 ACP
ACP's picture

Or to elaborate:

Step 1: Government creates program funded by taxpayers to blow bubble,

Step 2: Bubble pops, cratering the economy,

Step 3: Government uses this as an excuse to suck more money out of taxpayers' pockets.

...just wanted to provide the standard Economic Destruction Project Manager outline.

Thu, 03/14/2013 - 01:07 | 3328772 prains
prains's picture

UK Dentistry Czar on the Verge of Dentistry



Wow, that's good news

Thu, 03/14/2013 - 03:09 | 3328863 Wile-E-Coyote
Wile-E-Coyote's picture

My wife is a self employed book keeper in the UK, She has many clients. The sentiment is the same they are all exhausted just trying to survive. These firms have cut labour to the bone, used up all their cash reserves and are praying for a miracle. The only sector booming is TV and film work. Must keep the peasants distracted.

There is a big entitlement shake up from the 1 April in the UK, I expect rising social unrest. Bring it on!!

Thu, 03/14/2013 - 16:00 | 3330513 e-recep
e-recep's picture

i expect lootings but i dunno where on earth or when. many innocent people will be affected. at first the police will suppress the first or few waves of riots but at some point things will spiral out of control. expect copycat riots to break on various locations like falling dominoes.

Thu, 03/14/2013 - 00:18 | 3328675 JustObserving
JustObserving's picture

UK fears rise as cost of living soars four times faster than earnings

By   Last updated: March 13th, 2013

Household bills have risen four times faster than average earnings since the credit crisis began, according to the Office for National Statistics(ONS), leaving many families fearing worse to come from Budget 2013.

No wonder nearly three quarters of those questioned by comparison website said they feel poorer since the Coalition Government came to power. Worse still, 85pc of respondents claim Chancellor George Osborne “does not understand the real fears of ordinary people”.


Thu, 03/14/2013 - 08:14 | 3329104 uranian
uranian's picture

Household bills have risen 25% since 2008. The cost of car insurance, gas, electricity and petrol have seen the highest increases at 67%, 52%, 32% and 33% respectively.

British workers have seen their wages plummet faster than any other workforce in a developed economy, a new study reveals today. Real wages dropped by 4.5 per cent between 2007 and 2011.

Wed, 03/13/2013 - 23:05 | 3328501 newengland
newengland's picture

Is this like Fanny and Freddie incest, bailed out by U.S. taxpayers? Or perhaps like the SEC and Treasury?

Dear Crook,

Send your bill to our government department. The invoice will be paid by the taxpayer...after we get our wages.

Thank you, not.

Our Dear Leader must buy votes from nimbys, and newcomers. This is a one time offer (until the next time).

Send the check soon. Think of the the gulags, eventually.


Uncivil servants and career politicians fear that they may one day live in the economy occupied by most people.

Wed, 03/13/2013 - 23:02 | 3328505 Hulk
Hulk's picture

Anybody interested in starting a new planet ???

Wed, 03/13/2013 - 23:06 | 3328518 newengland
newengland's picture

We're stuck with this one, and c'mon, you know you love it. For better or worse. Family, kith and kin, right or wrong.

Wed, 03/13/2013 - 23:07 | 3328522 Cdad
Cdad's picture

Yes please.

Wed, 03/13/2013 - 23:12 | 3328530 newengland
newengland's picture

You first, space cadet. Meanwhile, pay attention to your own part of the universe first.

Wed, 03/13/2013 - 23:25 | 3328556 pashley1411
pashley1411's picture

Enjoy it while you can.   We are in that small space-time continium between "out of money", and "wots money?"  Obummer is already to the other side.

Wed, 03/13/2013 - 23:38 | 3328579 newengland
newengland's picture

He prefers back sides, according to his former friends in Chicago. Good lil pet, he is. No matter. His psychiatrist handler has him under control ... playing golf...appeasing Michelle...and reading scripts on order.

Wed, 03/13/2013 - 23:27 | 3328560 chump666
chump666's picture

Meanwhile a nasty fudge on Aussie employment figures:

71.5k increase in jobs in Australia last month

Whilst China sinks (CAPEX)


Wed, 03/13/2013 - 23:27 | 3328562 e_goldstein
e_goldstein's picture

Rule #1. Don't buy into the pigshit you are selling.

Wed, 03/13/2013 - 23:30 | 3328573 NoDebt
NoDebt's picture

Imagine that- the REAL collateral is not sufficent to cover the bail-out cost.  Color me shocked.

Are we learning yet?  No?  OK.  Carry on.


Wed, 03/13/2013 - 23:42 | 3328588 newengland
newengland's picture

Who funds ZH? Curious, isn't it. Anti-American and Brit. Undecided about the EUSSR. Pro everyone else. Hmmm...

Controlled opposition is the phrase that comes to mind or psy op....or foreign.

Wed, 03/13/2013 - 23:44 | 3328594 newengland
newengland's picture

The immediate Red Arrow strikes. Nuff said. Pet.

Declare yourself, scoundrel. I challenge you to a duel. Err...can't be bovvered mate, rusky.

Wed, 03/13/2013 - 23:56 | 3328618 akak
akak's picture

I didn't downarrow you, but I wonder what you mean in implying that ZH is somehow "anti-American".

In case you hadn't noticed, that aspect of the debate we leave to poster AnAnonymous, who travels in his lightning-powered magical time-traveling flying rickshaw to spread the word about his self-created "US Citizenism" to centuries past and even remote islands in the Pacific.

Thu, 03/14/2013 - 00:04 | 3328635 newengland
newengland's picture

Who funds ZH? Just curious. It's odd that the articles exclude criticism of the oligarchs from the former Soviet Union and Zionists who are big players in world banks and politics...and the ruin of nations.

Never a critical article on ZH about the oligarchs from the former Soviet Union, and current Russia. Those oligarchs, most hateful, robbing, and infesting the West with their ill gotten gains, along with money laundering, drugs, prostitution, the child sex trade, and buying prime real estate to pursue their warped ways in the West.

Who funds ZH?

Thu, 03/14/2013 - 00:11 | 3328652 Pure Evil
Pure Evil's picture

And, don't forget about the Protocols of the Elders of Zion! Damn, they should be all over that.

What pisses me off is that they aren't all over how extraterrestrials from Planet X (Niburu) are running this country into the ground. Not one word about it mind you. Turning us into wage and debt slaves, those assholes from outer space.

And, how could you miss the fact that Obummer is an alien/human hybrid, lets start covering that.

Thu, 03/14/2013 - 00:12 | 3328660 newengland
newengland's picture

Gosh!  And to think O'bomba told Putin that he has more 'flexibility' after the election, and drones on....

Who'd a thunk it?


Thu, 03/14/2013 - 00:19 | 3328678 knukles
knukles's picture

I dunno who owns it or funds it but sure are some bat shit crazy ass motherfuckers hangin' out hereabouts

Thu, 03/14/2013 - 00:30 | 3328691 newengland
newengland's picture

:-) knuckles.

Makes it fun, but I do wonder about who funds it because it herds sheeple. No mention of the bat shit crazy oligarchs of the former Soviet Union who raped and robbed their people, and send their money to the West, and buy blogs to slowly build for  a one world they can steal more from more.

We can still enjoy ZH. But a word to the wise: who funds it?

Thu, 03/14/2013 - 07:03 | 3329030 max2205
max2205's picture



Lots of backers 


They keep going broke shorting

Thu, 03/14/2013 - 16:10 | 3330553 e-recep
e-recep's picture

who cares about the funding. i'll hang around here as long as i see the truth being exposed. the one thing i didn't like was the censorship re the comments on the vatican clergy. it left a few question marks but i can live with that. no problem.

Thu, 03/14/2013 - 00:26 | 3328695 Pure Evil
Pure Evil's picture

Last I heard, the Los Zetas drug cartel was funding ZH. But, after reading about Chavez's gold being sold, I now suspect that the Tylers are Russian gold smugglers selling to little old ladies at skilled nursing facilities.

Thu, 03/14/2013 - 00:28 | 3328700 newengland
newengland's picture

Desperate to divert, aren't you 'pure evil'.

Thu, 03/14/2013 - 00:44 | 3328713 Pure Evil
Pure Evil's picture

Sorry about that, I had to put on my tin foil hat. I kept getting orders from the CIA/DHS/MIC to go on a secret mission to save the world. They kept saying something about 'active shooters' and stopping all sissor purchases.

Thu, 03/14/2013 - 00:54 | 3328721 tickhound
tickhound's picture

Not to defend evil in any way wahtsoeva... But I thought "desperate to divert" was ure schtick.

EVeryone's a fucking NAZI until proven otherwise? 

Right?  Pet?

And while we're on the subject of fuck everyone else but King David...

Um... I'm trying to come up with a name for "death camps for ANYONE else" other than NAZIS did it.  Stalin be damned.  Let's not even go there cuz that only leads to a more FUCK JOB to your implied argument.

I find it VERY difficult.

Cuz if I suggest "nazi death camp."..  that's Jews who are slaughtered.  The slavs, gypsies, etc. off topic at this point, or EVerypoint in time to you, but touche here.

Now, "jewish death camp" is also Jews getting slaughtered.


Now, I don't give a fuck.  Ironically enough, it's people like YOU who kill me.  GIB me dis,  GIB me dat. 

NO FUCKING DIFFERENT.  PA-fucking-thetic. 


Thu, 03/14/2013 - 00:55 | 3328747 newengland
newengland's picture

Eh? You are confused, but I guess you had to write.

Thu, 03/14/2013 - 01:04 | 3328765 tickhound
tickhound's picture

That thing you felt was the nerve I hit.

Thu, 03/14/2013 - 01:25 | 3328791 bunnyswanson
bunnyswanson's picture

Your name is Buck, and you came here to fuck, right? 

The course you are taking is reminds of the movie of a young man who was hired for as an accountant in Kansas, in early 1900s, after answering a help wanted ad.

As he lived several hundred miles away, it took him 2 months to sell what he had to gather the money for the trip there, via railroad car.  When he arrived at his destination, the position had already been filled; he failed to send a cable and let them know he was on his way there.

This left him to wander the streets destitute.  During this time, through simply being in the wrong place at the wrong time, he was framed for another man's death.  Because he had no verifiable alibi or a witness to prove his whereabouts at the time of the shooting, his lack of involvement,  he had no choice but to become an outlaw, hiding from sight, this 25 yr old accountant in wire frame lens.  Eventually, was befriended by a native Indian who, in the end, died trying to save him.  The accountant injured by now, died as well, a broken man, with no real grasp of what even led to his demise.  This is you and this is all of us.  We walked into this.



Thu, 03/14/2013 - 09:04 | 3329191 shovelhead
shovelhead's picture

Shit. Lousy story.

I was expecting to get The Lone Ranger and Tonto out of this.

Hi-yo Silver.

Thu, 03/14/2013 - 00:41 | 3328727 bunnyswanson
bunnyswanson's picture

Anyway you look at it, something is unfolding that they are not telling us about. You cannot deny that.  Only a fool would think that ruling their own kingdom is not every man's dream, if only by "saving the world" from all it's ugliness, in the setting of prayer.

Thu, 03/14/2013 - 00:57 | 3328751 newengland
newengland's picture

Yep. The Agenda. For the few, paid by the many,

Wed, 03/13/2013 - 23:46 | 3328602 newengland
newengland's picture

Never a bad word about the oligarchs who robbed and raped the former Soviet Union.

Thu, 03/14/2013 - 00:21 | 3328686 akak
akak's picture

Perhaps because the focus of ZH is current events and not history?

I am not trying to be flippant, but Russian oligarchs of decades past are pretty small potatoes in the monstrous seething shitpot that the world is today.

Thu, 03/14/2013 - 00:44 | 3328725 newengland
newengland's picture


I must disagree, and no disrespect to you, nor anyone.

But it is a fact that the former Soviet Union today is robbed blind by its oligarchs. The people's land, money, food, water, everything has been stolen since perestroika. Drunk Yeltsin was the mob, the gangster banksters choice. And all they stole is now pumping up prices in Western real estate, poisoning the West with their sick ways while ordinary people in the former Soviet Union starve.

ZH never links the Russian mafia to this world blight. That makes me wonder: who funds ZH?

I like the sound analysis of ZH articles, but the absence of criticism for the oligarchs of Russia who ruined their own country does make me question the intention of ZH.

It is an editor's job to select articles. Interesting that ZH chooses to omit articles about the vile, hateful ways of Russian oligarchs.

Thu, 03/14/2013 - 04:24 | 3328921 Ghordius
Ghordius's picture

newengland, the Russian oligarchs are, in the greater scheme of things, just eastern thugs that sit on resources. meanwhile we have legions of western weasels that have constructed great pyramids of paper bets on top of the whole western financial system until they started to crash and burn - in part

zerohedge, if you remember, started with and around the scandals of the 2008/2009 debacle, and lives on the contributions of people out of the financial world that is still trying to sort out the mess (with an eye on what to bet on) - here, the Russian Oligarchs are part of those who are in danger of being further fleeced

may I point out that it's a sign of your US/UK-centric progressive "globalist" attitude that you judge them? in a different approach you could say that they are the Russian people's problem ;-)

you want to bring them to justice? isn't this the very path to a one-world-government? one that dispenses justice to the whole globe?

Thu, 03/14/2013 - 06:40 | 3328970 falak pema
falak pema's picture

John Bull in tattered robes just after the London Olympics; what a dream gone wrong that is for Boris of Bullingdon. 

And, now Cameron singing lets have US-EU trade to spread even more the OMG type disease via City betting. 

I think the most iconic picture of UK/US special relationship today, now scotched together by joint and several oligarchy financialista frenzy, is this two towered shangrila imagery which says it all : 

Who Lives In London's One Hyde Park? - Business Insider

Who Lives At 740 Park Avenue In New York? - Business Insider

All based on this ongoing ra-ra hopium to eternity : 

Citi: Long Stocks, Long Dollar, Sell Treasuries - Business Insider

MORGAN STANLEY: Inflection Point Ahead - Business Insider

European Markets Update, March 14, 2013 - Business Insider

Why are we such doomers - gloomers here at ZH?

The faithful have just elected a NEW pope! 

And the rich are getting richer as we talk! 

All we need now is some good herd thinning in those darker regions of the globe for elitist globalisation to triumph truly! 

Gail Tverberg Energy Predicament Charts - Business Insider

Wake up to tommorow's real world! 

I'm going long in feudal suit and armour and looking for templar swords and Ottoman yatagans...Lepanto and <Mongol hordes!

Thu, 03/14/2013 - 07:13 | 3329043 Ghordius
Ghordius's picture

I see you and raise with this Vanity Fair article: mysterious residents one hyde park london - A tale of two Londons

seems it's also full of various oligarchs, including some Russians

note the references about the City of London Corporation and it's hilarious nickname I did not know before: "the Guantanamo Bay of Finance"

Thu, 03/14/2013 - 10:03 | 3329310 falak pema
falak pema's picture

Lol, "When did you last finance Ben Laden, you damn no-good Sheikh!"...Too funny. A prison for all the Saud clique. 

Thu, 03/14/2013 - 04:35 | 3328932 Ghordius
Ghordius's picture

newengland, from above, "ZH...undecided about EUSSR" - how so? can't remember that ZH had ever and article that was "undecided" about either the EU or the eurozone

on the opposite, it's full of articles that go on bs like "the EU is like the US", followed by further bs like "only worse" and so on

interestingly, when it comes to the US it's usually about "too much spending" and when it comes to europe it's usually about "too much austerity"

compare it with the "Americans are focused on liberty" vs "Europeans are mindless statist drones" dish served on the side

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