Insolvency Case Study
Type of Work: Antecedent Recoveries
Challenge
Our client was appointed Liquidator of the Company following the making of a Winding Up Order. They subsequently appointed My Debt Recovery to assist with the identification of any claims due under the Insolvency Act and to collect any monies due.
The Company was part of a group, and the Liquidator was aware that across the group there had been a lot of connected party transactions that would need to be reviewed such as loan accounts, asset transfers and allocation of trading receipts and payments.
Immediately upon appointment we attended the trading premises to secure all books and records to include computer records.
From here, we undertook a thorough investigation which included restoring and analysing SAGE, reviewing the transactions through the bank account, contacting 3rd parties to obtain information, investigating the movement of assets, and interviewing the directors.
Solution
We identified several claims against the connected parties to include preference payments, overdrawn loan accounts, transactions at undervalue and misfeasance. Following identification of these claims, we formulated a letter of claim to the relevant parties and the matter proceeded to mediation which we attended along with the Liquidator and solicitors.
Result
Reconciliation and collection of an overdrawn loan account totalling £30,000.
A full and final settlement of £600,000 against various parties which was payable over 12 months.
Agreement of the secured party to surrender all security over the Company assets and not prove in the Liquidation for dividend purposes (with a claim of circa £2m).
