Information Management Enables Liquidation Processes
The BCCI liquidators chose Iron Mountain to store, manage, and, ultimately, dispose of, company records and files.
CHALLENGE: Rapid response needed to catalogue, transport and store 90,000 boxes of files in just a few weeks.
SOLUTION: Records management service with uplift and relocation of files managed by a dedicated, specialist Iron Mountain project team.
VALUE: Quickly-implemented, cost-effective service enables liquidation process with minimal administration for the liquidator.
The Bank of Credit and Commerce International (BCCI) was a major international bank founded in 1972. Registered in Luxembourg, it had head offices in Karachi and London and more than 400 branches in 78 countries worldwide, including around 25 in the UK. In 1991, the bank came under the scrutiny of financial regulators. It was declared insolvent, placed into provisional liquidation in July 1991 and ultimately put into liquidation in January 1992. Partners of Deloitte (then Touche Ross and Co) were appointed liquidators of the English Branches in January 1992. Worldwide, some 74,000 creditors submitted claims totalling US$8.5 billion.
The liquidators’ priorities were to maximise debt recoveries and pay BCCI’s creditors from the realisations made. Company records were a vital asset for the liquidators, essential to enable the pursuit of debtors, validation of creditor claims, and the swift recuperation of funds.
In the UK, BCCI had run its own company archives from a building in London’s America Street. These records, along with all locally held records at the 24 UK branches of BCCI still operating at closure, were transported to BCCI’s main branch in Leadenhall Street in the City of London. In total, the contents of around 50,000 boxes were recorded and indexed and sent to a third party storage company.
The liquidators were also generating records that needed to be retained to meet insolvency regulations, so the document archive continued to grow. By the mid-2000s there were more than 90,000 boxes of documents in store. Rob Wheeldon, Assistant Director at Deloitte, takes up the story. “Unexpectedly, our storage contractor gave us notice that it was to close its storage facility. We had just three months to make alternative arrangements for BCCI records storage.”
Deloitte already had a relationship with Iron Mountain for the storage of its own company records, so it was the obvious place to turn. Rob Wheeldon continues: “To safeguard available funds for creditors we needed to ensure that ongoing management and storage costs were reasonable and we also wanted to minimise incremental uplift and transfer charges. Iron Mountain was very flexible and we were soon able to work out a commercial arrangement that suited both parties.”
The project was a substantial logistical undertaking and, with the closure deadline looming, there was no time to lose. Andrew Brown, Business Development Manager at Iron Mountain, confirms: “Iron Mountain has dedicated specialist project teams that can be mobilised to take on projects of this nature, often at very short notice. So that’s exactly what we did.”
In a matter of weeks, all records had been identified, barcoded, loaded onto pallets and transported to an Iron Mountain state-of-the-art storage centre – a task that involved around 150 fully-loaded articulated lorry trips. As the transfer progressed, data was entered into the Iron Mountain records management database. This meant the liquidators could place orders for document retrieval and return via the IM Connect ™ customer web portal from just two days following uplift.
The project was completed on time and on budget, with document security and access maintained as agreed.
The contract with Iron Mountain also makes provision for the secure destruction of records when they are no longer required. This process began a few years ago and by 2012, around 45,000 boxes of documents had been safely destroyed, so reducing the liquidator’s ongoing storage costs. The remainder of the records will need to be retained for six years beyond the end of the liquidation period.
The liquidators have most recently negotiated a new deal with Iron Mountain that makes provision for all anticipated future storage and disposal costs so that these can be built into the final accounts. Rob Wheeldon says: “Iron Mountain understood our specific requirements. It agreed a fixed six-year cost, with a pre-defined installment‑based payment agreement against the overall service cost. This concession has reduced administration, simplified accounting, and allowed us to reclaim all the VAT on storage costs, for the benefit of the creditors.”
Procedures have also been agreed that will enable the remaining records to be destroyed at the end of the statutory period, with just a bare minimum of involvement from Deloitte. Andrew Brown confirms: “Records management is our core business and we have extensive experience developing contracts specific to the requirements of insolvency practitioners. In these particular situations, we can turn around quotations and have a project manager on site within a very short timescale.”
Project teams can also help with archive management; including cataloguing documents at file level and boxing or re-boxing documents to allow safe, coherent long-term storage and scheduled destruction. These services are available for projects involving fewer than 100 boxes, right up to and beyond the 90,000 that the liquidators had to manage for BCCI.
Rob Wheeldon sums up: “Working with Iron Mountain we have total peace of mind. We know the records are in safe hands, we get good value for money, and we have the assurance that files will be securely disposed of when the time comes.”