Firms leave £20m unclaimed from bankruptcies

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A £20 MILLION cash pile is ­lying unclaimed by businesses that are owed money after their customers have gone bust.

The figure is higher than ­expected and has surprised ­insolvency practitioners at a time when money is tight.

Figures released by the Office of the Accountant in Bankruptcy (AIB) show that £20.4m was left unclaimed in the year to 31 March – up from £11.4m in 2008.

The cash pile sitting in the AIB’s bank account is money that is still owed to creditors after the assets of collapsed firms have been sold.

Matt Henderson, an insolvency partner at accountancy firm Johnston Carmichael, said: “It is odd that such a large amount lies unclaimed at a time when there is so much financial pressure on businesses in Scotland.”

Henderson said the downturn in the housing market meant that it was taking longer for assets such as properties to be sold on the open market and so many creditors have become fed up waiting for their cash and have given up.

He blamed “creditor apathy” in part for the rise in the amount of dividends left unclaimed, saying that many creditors will change address without telling insolvency practitioners, making it harder for them to be traced.

Henderson added: “Like many insolvency practitioners, I find it very frustrating when businesses don’t collect the amounts due to them. While the AIB claims it is taking a more proactive approach, the onus remains on businesses to pursue this money.”

Henderson said that the rise in the amount of cash left unclaimed was also in part due to the number of construction companies going bust.

“There are often significant accounts to be agreed and defect liability periods to expire, which means dividends can be delayed for years,” he added.

Data released in October by the AIB showed that both the number of individuals and companies becoming insolvent in Scotland fell by about 25 per cent year-on-year during the three months to 30 September.

The decrease came as a ­welcome relief after personal and corporate bankruptcies reached record levels in the previous three months.

But experts warned the dip could be the “calm before the storm” as the number of pay-day loans increases. Insolvency statistics tend to be a “lagging indicator”, meaning the number of firms going bust can rise even after an economy emerges from recession.

In its 2010-11 annual report, the AIB said it held on to unclaimed dividends for seven years before giving them to the “Scottish Consolidated Fund”, the pot of money from which the Scottish Parliament and its agencies are financed.

The AIB did not return calls for comment.