HMV vouchers 'not invalidated', says accountancy group

The appointment of an administrator in the UK and a receiver in Ireland to the HMV group has not invalidated any HMV Ireland gift vouchers, an accountancy firm has said today.

The vouchers are still legal debts of HMV, according to Aidan Clifford, advisory services manager of Association of Chartered Certified Accountants (ACCA) Ireland.

ACCA said that it was also wrong of HMV Ireland to refuse to accept vouchers as payment after the administrator was appointed in the UK, but prior to the receiver being appointed in Ireland.

The organisation said that it expects the Director of Corporate Enforcement to have a close look at that issue when the time comes.

"There are three main insolvency options for a retail company: receivership, examinership or liquidation," said Mr Clifford.

"Gift vouchers are treated differently under the three procedures.

"In an examinership, (called an administration in the UK) you would expect the gift vouchers to be legally written off and be worthless after the procedure, but this is up to a judge to confirm.

"In a receivership the gift vouchers still have full value and cannot be legally written down in value.

"In a liquidation, you would expect the gift vouchers, as unsecured creditors, to be legally written off by the liquidator.

"Unfortunately a receivership is usually followed by the appointment of a liquidator; but not always.

"The appointment of an administrator or liquidator to an UK parent company does not in any way affect the value of vouchers issued by a separate Irish subsidiary.

“In a receivership, the receiver will take control of the assets of a company, but they have no legal right to extinguish the value on a voucher; only a liquidator or judge can do that.

"A receiver is appointed by a bank and tasked with realising as much money as possible for the bank to pay off loans that the company might have.

"The receiver will often achieve the best outcome by selling the business as a going concern, and in these circumstances the vouchers should retain full value.

"The receiver could arrange a complicated split up and resale of the business to leave the liability for the vouchers in the existing company and sell the trade to a new company, thus stranding the vouchers in a company that has no assets and facing certain liquidation.

"Nothing is certain, but gift vouchers do not always lose all of their value when a receiver is appointed.

"If a buyer for the HMV trade can be found, then the vouchers are most likely going to be honoured."

Concluding, he said: “If you pay money over to an auctioneer, solicitor, accountant it is lodged into a legally protected client account.

"In the event of the insolvency of the auctioneer, solicitor or accountant, your money is safe and will be refunded to you.

"Perhaps it is time for our politicians to look at a similar protection for retail deposits and gift vouchers."

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