£17.3m of creditors' cash goes begging

Published on Monday 26 October 2009 20:40

THE amount of money left lying unclaimed by creditors of failed Scots businesses has risen nearly seven-fold in the past four years, figures have revealed.

The latest report from the Accountant in Bankruptcy (AIB), the Scottish Government agency that supervises sequestration, shows that 17.3 million of unclaimed creditors' cash is held in fund – an increase of 63 per cent since December 2007 and up from 2.5m in 2005.

Matt Henderson, a business recovery and insolvency partner with accountancy firm Johnston Carmichael, said creditors should not give up on being paid by failed businesses. "It's incredible that in the current financial climate' businesses are still prepared to let good money slip away," he said.

"When businesses go bust, some companies seem to give up being paid, when in fact there can often be money available.

"In a recession, businesses should be more cash-conscious but these results indicate nothing has changed and a rising level of apathy seems to exist."

The AIB is to invest in technology to help creditors register for payments. Henderson praised the move but said it was not clear if this would help uncover historical cash for creditors.

"Meanwhile, if you are a creditor, do not give up or turn a blind eye, as it could turn out to be an expensive mistake," he added.