75% success rate for debt arbitration angels

A new breed of business "angel" has helped nearly 50 construction companies avoid bankruptcy by reducing their outstanding debts by a total of œ1.5 million.

Churchill Clarke McGill is a business debt arbitration specialist which claimed this week to have a 75 per cent success rate by renegotiating reductions with creditors of up to 70 per cent of the original debt owed.

The specialist, whose parent company Valcor has been operating as a business debt arbitrator in the USA for 40 years, set up in the UK eight months ago.

45 contractors have been saved from bankruptcy so far.

Simon McGill, a qualified management accountant and managing partner at Churchill Clarke McGill said: "We offer creditors the chance to get around 50 per cent of the debt back on average, whereas if the case went to court they would face court bills and a lengthy process at the end of which they might not get anything.

The company, which operates on referrals from solicitors, banks and accountants, works on a no win-no fee basis. If successful it takes a fee of 35 per cent of the reduction obtained for the client.

McGill says his company is one of only a handful established in the UK: "It's a new concept in the UK which is slow to accept new ideas but I think that it will gain in popularity."

A spokesman for the House Builders' Federation said: "Late payment of debts is a huge problem for small businesses and any initiative that can help them carry on trading is welcomed by our industry."