The government, the regulators, the industry and the banks may be able to ignore the consequences of various practices, but their impact is real enough. Mrs. Josephina Askew held leases to two pubs (Morning Star and Ye Olde Crowne) in Lincoln city centre, a bungalow in a nearby village, a property in skegness and an apartment in Venice. These assets were estimated to be worth some £550,000. Mrs. Askew (50) looked forward to a comfortable retirement after spending some 28 years in the trade. Then a chain events was to shatter Mrs. Askew’s life and she cannot ask any independent ombudsman to adjudicate.

In 1992, Mrs. Askew fell ill (subsequently diagnosed as a thyroid problem) and the paperwork became neglected. Wine merchants Peter Dominic took action to recover a debt to £4,430.63. Mrs. Askew was unable to attend the court, but the judge signed the legal documents declaring Mrs. Askew bankrupt . Unfortunately, the judgement was obtained (in Lincoln County Court) against a Mr. Askew (her manager) and not Mrs. Askew. Before proceeding further, it is appropriate to clear up the confusion regarding Mr. Askew. The chronological list of events is as follows.

On 5th August 1991, a writ naming a Mr. Jack Askew as the sole defendant was issued in the Northampton District Registry by Peter Dominic, a wine merchant, claiming a debt of just £4,145. On 14th October 1991, a judgement was entered against Mr. Askew in default in the sum of £5056.96 and on 8th July 1992, a statutory demand was served on Mr. J. Askew for the judgement debt. Subsequently, on 13th October 1992, a bankruptcy petition is presented against Mr. Askew. On 4th February 1993, the petition is adjourned for procedural defects and on 16 March 1993, Mr. Askew is granted leave to amend the Petition, but the bankruptcy order is amde agianst him. On 8th June the bankruptcy order against Mr. Askew is set aside and on 9th July 1993, the court judgement against Mr. Askew was set aside.

The events relating to Mrs. J. Askew are as follows. On 8th July 1992, a statutory demand for the overdue debt is served on her. On 31st December 1992, a substituted Bankruptcy Petition is served on her. On 4th February 1993, a Bankruptcy Order is made against Mrs. Askew. Followed by the appointment (on 22 February 1993) of a Trustee in Bankruptcy. Subsequently, Mrs. Askew made a number of unsuccessful attempts to have the bankruptcy order against her annulled on the grounds that the original was incorrectly drawn up. However, the courts rejected her application on the ground that any change would prejudice the interests of her creditors.

On 4th February 1993, Mrs. Askew’s balance sheet showed net assets of £377,148. The legal documents relating to bankruptcy were served on her in the hospital where she was recuperating. The locks on her pubs were changed and the Trustee also proceeded to take charge of the assets in Venice. The very act of appointing a trustee alerted creditors and affected the business. Under the terms of the leases for pubs, the brewery company insisted that a bankrupt would not be allowed to run the business and the brewery seized possession of the pubs.

To mitigate the effect of her bankruptcy, Mrs. Askew was advised to into an Individual Voluntary arrangement (or an IVA, as it is known in the insolvency trade), and the same trustee now became an administrator. The trustee alleges that Mrs. Askew’s full co-operation was not forthcoming. Mrs. Askew alleges that the Trustee has not been forthcoming with full information and indeed has met him only once. Another insolvency practitioner commenting on the Trusteeship noted, “If the leases have been surrendered, forefeited or still retained, the Trustee should be invited to provide copies of correspondence/documentation showing the appropriate professional advice taken at the time. ...... It appears strange too that the Trustee does not appear to have consulted or notified Mrs. Askew about any decisions concerning the two business leases. Again he should be required to provide copies of all correspondence with Mrs. Askew” (letter dated 19 January 1994).

Mrs. Askew’s estate has been depleted by some £120,000, all to settle a debt of just £4,430.63. A complaint to the DTI (on 24th May 1996) drew the response that it is a matter for the Institute of Chartered Accountants in England & Wales (ICAEW) and the Minister then added that the “Institute sought detailed information from [the Trustee] but were unable to susbtantiate the claims which had been made by Mrs. Askew”. The ICAEW has not issued any report. The nature of its inquiries and evidence, if any collected, is not known. Mrs. Askew has not been given any sight of any information collected by the ICAEW or asked to corroborate any statements made by the Trustee. Some eight years later (2000), the Trustee is still collecting fees.

Mrs. Askew cannot appeal to any independent ombudsman because there isn’t any. She is expected to take legal action against the trustee but like other people in her position, she does not have any financial resources.