What insolvency practitioners need from an auctioneer

If you are an insolvency practitioner appointed over a business with physical assets, you need an auctioneer who understands that your duties come first. You have to realise the assets for the best price reasonably obtainable, keep a clear record of what you did, and account to creditors for the proceeds. This guide sets out what we do at each stage and what we will need from you.

Instruction and the terms of engagement

We need a written instruction from the office holder, confirming the appointment, the entity, the sites and the scope. The letter should state whether we are instructed to value only, to sell, or both. It should also confirm who has authority to approve reserves and to release lots.

Our terms will set out the commission, the buyer's premium, any fixed costs and the basis on which we hold and account for sale proceeds. Proceeds are held in a client account and paid to the estate, not to any director or former owner.

The asset schedule and valuation

The first job on site is a full schedule of the assets, room by room, with photographs and serial numbers. This is the document everything else hangs off. Where you need a valuation for your report to creditors, we provide it on a stated basis: normally an estimate of what the assets would realise at auction on the site over a short marketing period, and a separate figure for the value in situ if the business or site were to be sold as a going concern.

We will say clearly where an item has no value or a negative value, for example a machine that will cost more to remove than it will fetch.

Retention of title, finance and third party claims

Before anything is offered for sale we check for third party interests. This is the area most likely to cause a problem after the sale, so it gets attention early.

• Retention of title. Suppliers who delivered goods on ROT terms may have a valid claim to stock still on site. We separate and hold any goods identified as potentially subject to ROT until you have adjudicated the claim.
• Hire purchase, lease and finance. Any asset on finance belongs to the funder until settled. We check nameplates for finance company tags and cross reference against the company's records and your enquiries of known funders.
• Vehicles. Every vehicle is HPI checked before it is catalogued. Outstanding finance, write off markers and mismatched registration details all come back on that check.
• Landlord and hirers. Fixtures may belong to the landlord under the lease. Items on hire, such as welfare units, compressors or racking, belong to the hire company.

Where a claim is disputed, the item is held out of the sale or sold with the proceeds ring fenced until the position is resolved. We do not sell anything we believe the estate does not own.

Site security and the building

An empty site with a catalogue online is a target. Equipment goes missing between instruction and collection more often than people expect. We advise on locking down the site, changing codes and access, and where appropriate arranging a security presence during viewing and collection days. Where former staff or directors still have keys, that should be addressed on day one.

We also need to know the position with the landlord. Whether the lease has been disclaimed, whether the landlord has agreed access for the sale period, and the date by which the site must be cleared all shape the timetable.

Health and safety during the sale

Viewing and collection days bring members of the public and contractors on to a site that may be part dismantled. We produce a method statement for the sale, control access, and require buyers removing plant to carry their own insurance and, where lifting is involved, to use equipment with a current LOLER examination. Gas disconnection is by a Gas Safe registered engineer only.

Reporting and reconciliation

After the sale you receive a full account: every lot, the hammer price, the buyer, whether it was sold, unsold or withdrawn, and the VAT position. We provide the buyer invoices, the sale terms and the bidding records so the file shows how the price was found.

The reconciliation sets out gross proceeds, our commission, agreed costs and the net sum remitted to the estate. Unsold lots are listed with a recommendation for each: re-offer, private treaty, scrap or disposal. WEEE and hazardous waste disposals are documented with waste transfer notes.

If you have an appointment coming up and want to talk through a site before you are formally in office, we can do that ahead of any instruction.