Her proposal for an Individual Voluntary Arrangement (IVA) was accepted on November 30th last year but renewed bankruptcy proceedings were brought after she failed to keep up with the terms of the agreement requiring an approx. £12,000 monthly payment to her creditors.
Thrice married Price, aged 41, has five children from previous relationships and is currently with her third husband after two expensive divorces.
Two of her companies, Pricey Media Ltd and Marvellous Creative Group Ltd, were both placed into Members Voluntary Liquidation (MVL). Her remaining companies KP Bling Ltd had £100 of assets when they were last reported in May 2018 and KDC Trading made a loss of more than £21,000. She resigned from her clothing company KP Boutique in June after it made £13 profit last year.
Her accumulated debts which led to the IVA are quite eye-opening:
At the height of her fame, Katie Price, also known as Jordan early in her career, was worth £45m from glamour modelling, personal appearances, books, starring in reality TV shows like Celebrity Big Brother and I’m A Celebrity, Get Me Out Of Here and other ventures using her name or likeness.
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An IVA is a formal and legally-binding agreement for an individual to make monthly repayments to their creditors.
It’s a workable and credible alternative to bankruptcy and can last anywhere between five and seven years.
In the event of bankruptcy however, a licensed Insolvency Practitioner or official receiver will act as trustee which places them in charge of the assets. This means they decide what they can spend money on above basic living expenses during this period of bankruptcy.
Borrowing is also curtailed with any amount over £500 that you want to loan having to be declared in advance although being in bankruptcy it’s unlikely that any application for finance would be accepted.
Credit scores are impacted and the bankruptcy will stay on file for at least six years. If the terms of the order are broken then restrictions could be extended for up to 15 years.
In cases where a lot of debt has to be paid then any houses owned could be sold, although the owner will be given 12 months to find a new place to live. There may be other economies that have to be made if there are other saleable assets that could be realised to raise funds.
Chris Horner, Business Rescue Expert’s Insolvency Director said: “An IVA is not a financial death sentence or a life sentence for penury.
“An IVA can be a positive for many people as it brings financial discipline into their lives, especially if they haven’t had much previously or learned to manage their money properly. .
“It’s like a money coaching exercise - people with one have to learn to live within their means and it can give them a sense of purpose to take responsibility about planning and spending in advance rather than just reach for a credit card or get further into debt.
“Having to think about a purchase rather than just saying yes on impulse is a skill which some people never learned and some enjoy practising once they learn how to do it.”
If your personal finances are in a state that even Ms Price would wince at then you should get in touch with us.
They move from one gilded success to another without any downturn in between. Even notoriously hard careers such as running their own business comes easily to them as the profits and plaudits perpetually roll in. Except when they don’t.
The law applies to celebrities as much as it does to “civilian” directors as it turns out being a celebrity does not give you a golden ticket to business success - no matter how much of a winner you are.
Take David Weir, better known as the Weirwolf. He’s one of Britain’s most decorated paralympians with eight London Marathon wins and six gold medals to his name with his sights set on adding to his collection in the Tokyo games next year.
Training to paralympic standard leaves little room for anything else including meeting tax deadlines as he found to his cost this year when he was disqualified from being a company director for four years after failing to pay nearly £50,000 in overdue taxes. He’s unable to act as a UK company director now until 2023 at the earliest.
He put his company, David Weir Limited, into liquidation in 2017 but further investigations by The Insolvency Service discovered that while he had received more than £400,000 from the company during its five years of trading, it had only paid £30,000 in corporation tax, owning an additional £49,469 to HMRC.
The Insolvency Service said: “Mr Weir failed to ensure that David Weir Limited met it’s financial commitments as regards to corporation tax and S455 tax and caused the company to continue trading whilst withdrawing funds for the benefit of himself. As a result the company became unable to meet its financial commitments to HMRC.”
Popular Greek international goalkeeper Dimi Konstantopoulos who served Middlesbrough and Hartlepool United with distinction recently saw his contemporary Greek restaurant "Great" close quickly.
Gareth Stobart, manager of Penza Properties' agent for the building, Linthorpe Property Management, confirmed the locks had been changed and told the Teesside Live website: "We have had to take the property back due to the amount of debt owed.
"The locks have been changed and we have gained access back to the building. Our lawyers are coming up with a few solutions to the way forward."
The Price is Right
Other celebrities try to diversify their business interests into different product ranges based on their fame and personality.
Katie Price is a ubiquitous celebrity presence with many ventures including TV shows and appearances, clothing lines and fragrances.
The Insolvency Service thought something smelled funny with her company KDC Trading Limited which hadn’t filed any accounts since 2017. Despite a warning that the firm would be dissolved if no accounts were forthcoming, the deadline passed in June this year and the firm will be broken up as a consequence.
The company sold equestrian and clothing lines and the last filed accounts for April 2017 showed a deficit of £22,000. Katie Price also entered into an Individual Voluntary Arrangement (IVA) last year to avoid personal bankruptcy and give her the chance to pay off some of her personal debts.
Liquidators are already going through the process of breaking up another Price owned company - Jordan Trading Ltd - which is the subject of a liquidators report to The Insolvency Service.
Chris Horner, Insolvency Director of Business Rescue Expert, explains further: “When we work with an insolvent company, we have to submit a report on the conduct of each director of that company to The Insolvency Service.
“Most of the time there’s nothing untoward to report and everybody has done their best to keep the company going. Sometimes though, we do find misconduct and we have to investigate the extent of it to determine if the director involved is unfit to manage companies in the future.
“Misconduct covers many things including:-
“The Insolvency Service considers the report along with any other information or previous reports and will investigate further if necessary. They’d then look to go to court to enforce disqualification if the defendant does not accept a voluntary disqualification undertaking.
“A voluntary undertaking would usually be more lenient than a court ordered disqualification regarding the length of the ban. The minimum disqualification period is two years but it can be up to 15 depending on the seriousness of the offences.
“If a person acts as a director while banned then they’re committing a criminal offence and can be held personally liable for all the debts of the company they’re managing.”
The majority of clients we work with have been diligent with no blame attached as they executed their lawful duties to help keep their businesses alive.
If you’re done everything you can and you need some help or if you’re anxious about the investigation process then contact us today.
One of our expert advisors will set up a convenient and free initial consultation with you to discuss every aspect of the insolvency procedure including any possible likely investigations.
