Blog
A nervous disposition
Daniel Staunton
We have considerable experience in advising on all aspects of insolvency litigation, including acting for insolvency practitioners, companies, individuals and directors. We are uniquely placed to assist with complex insolvency litigation matters, with particular strength in fraud cases.
In addition to the experience of our commercial litigation team, we can also draw on the expertise of our leading specialists across the firm which means that we are uniquely placed to assist with complex insolvency litigation. We have the benefit of internal specialists in areas including fraud, employment, real estate, regulation, corporate and criminal law to enable us to advise clients on the wide variety of legal issues that can crop up in an insolvency process.
We have particular strength in fraud cases. We are regularly instructed to assist in asset tracing including utilising the full spectrum of insolvency powers available to investigate, locate and preserve assets. We have extensive experience in cross border recovery, asset freezes and search orders and we have the benefit of working with our leading criminal law team and professional advisers in other jurisdictions to assist as necessary.
We can advise on the full range of contentious insolvency matters, including:
- administrations;
- bankruptcy;
- liquidations;
- provisional liquidations;
- claims by insolvency practitioners;
- preferences and transactions at an undervalue;
- statutory demands and winding-up petitions;
- advice on Insolvency Act section 234 (delivery up of property), section 235 (duty to co-operate) and section 236 (provision of documents and information);
- voluntary arrangements (individual and corporate);
- wrongful trading;
- fraudulent trading;
- other fraud and misconduct offences;
- investor and shareholder disputes;
- claims against former officers;
- protection of assets and injunctions; and
- asset recovery.
Please see the following pages to access the advice you need:
- Insolvency Practitioners
- Individuals (including advice on bankruptcy and individual creditors)
- Companies
- Directors
Examples of recent cases
The recent insolvency litigation work we have undertaken includes:
- acting for insolvency practitioners in obtaining multiple urgent out of court administration appointments including advising on their powers and post appointment issues including ROT claims, purported exercise of liens, cross border elements, furloughing/redundancy of staff and termination of leases;
- advising office holders and directors on their powers and obligations under section 234 (delivery up of property), section 235 (duty to co-operate) and section 236 (provision of documents and information) of the Insolvency Act 1986;
- advising creditors in proving their claims in both administrations and liquidations including successfully challenging the joint liquidators’ failure to adjudicate in a timely fashion and negotiating payment in full plus interest;
- advising office holders, creditors and shareholders on their rights and powers to bring claims against delinquent directors including antecedent transactions (particularly, risk of wrongful trading and fraudulent trading claims);
- acting for the liquidator of a Cayman company in relation to a pension scheme being investigated by the Serious Fraud Office;
- advising companies on statutory demands and obtaining injunctive relief in relation to the presentation of winding-up petitions;
- negotiating the discontinuation of directors’ disqualification proceedings against our client, including payment of a significant proportion of his costs;
- acting for a trustee in bankruptcy seeking to challenge various transactions, including a divorce settlement, and to challenge an employee benefit trust on the basis that it was a sham;
- acting for a liquidator seeking to recover fees paid to the former administrators on the basis that they were excessive for the amount of work done and raised in breach of the fiduciary duties owed by the former administrators.
- acting for a liquidator to recovery early termination charges mistakenly paid under a factoring agreement;
- acting for a company challenging a third party debt order and a charging order obtained by trustees in bankruptcy on the basis that the ‘loan’ the orders are based on was in fact a settlement into a trust;
- acting for a director whose company had been placed into Provisional Liquidation following the service by HMRC of Notice of Assessments in excess of £7million. HMRC issued a winding up petition against the company and the Provisional Liquidator issued misfeasance proceedings against the director. We represented the company in opposing the winding up petition which was listed for a 10 day hearing. The matter was heavily contested and was settled just before the hearing.
For more information, have a look at our frequently asked questions on insolvency litigation and read our case studies.
We can give advice and discuss the various options available for funding insolvency litigation which may include acting on a Conditional Fee Agreement or obtaining litigation funding from a third party funder.
William Christopher
Partner
Michael Mulligan
Partner
Fiona Simpson
Partner
Mary Young
Partner
Mark Fallmann
Associate
Hannah Fitzwilliam
Senior Associate
Daniel Staunton
Associate
approachable litigators who are efficient and organised. They take the time to know the case and to know the client."
Chambers and Partners, 2019
sensible, realistic view of cases - seizing only the points worth arguing..."
Chambers UK, A Client's Guide to the Legal Profession
Latest blogs & news
A nervous disposition
Daniel Staunton explores the inherent conflict between the jurisdiction of the bankruptcy courts and the family courts and asks which jurisdiction trumps the other? This article focuses on the authorities in relation to section 284 and when family court orders might be liable to be set aside as void dispositions
On the rebound: How to clawback from a divorce
Mary Young explores how divorce settlements between spouses may be caught later down the line in bankruptcy proceedings as potential TUVs where there are dishonest motives.
Convergent Divergence: When bankruptcy and the family courts collide
What often happens when the insolvency courts and family courts collide; the potential effect a bankruptcy order of one spouse can have on a financial order made in favour of the non-bankrupt spouse and the different tests of each court.
One hand in the cookie jar: Fraud and directors’ duties in insolvency
What happens when a director commits fraud by misappropriating company assets? Or what of the director who continues trading knowing that the company has no realistic prospect of paying its debts as and when they fall due? To whom does a director owe duties at that point and what recourse is there against that director? This article explores these questions.
£26 billion fraud: The other side of the Coronavirus Business Interruption Loan Schemes
We have previously examined how the Government’s Coronavirus Business Interruption Loan Schemes (the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBILS)(together the “Schemes”) work. A report issued by the Public Accounts Committee on 10 December 2020 highlights the darker side of the Schemes and what it is costing the UK taxpayer.
The Queen’s Gambit: Crown Preference
This article will focus on Her Majesty’s Revenue and Custom’s (HMRC’s) “gambit” to gain an advantage over other creditors through the return of the “crown preference” from 1 December 2020. This article explores what HMRC’s status as a secondary preferential creditor means and its implications for insolvency practitioners and others going forward.
Civil Fraud Quarterly Round-Up: Q4 2020
A Civil Fraud quarterly round-up (4th quarter 2020)
Money, money, money: what are directors’ duties in respect of the company’s bank account?
Disputes between directors often arise because of, and/or result in, disputes about company money. Directors need to be alert to how they are required to act, particularly in times of conflict.
Insolvency Practitioners: the regulator’s reach is wide when it comes to integrity
It goes without saying that Insolvency Practitioners must behave honestly and with integrity in all their professional dealings. IPs must handle money and assets in a way which justifies the trust placed in them, but some professionals don’t realise that the way they behave on a Saturday night may be just as relevant to their ability to continue in their chosen profession as the way they behave on a Monday morning.
Fraud and opportunism during COVID-19
The current global pandemic has provided and will continue to provide plentiful opportunities for fraud and opportunism.
Insolvency and furlough fraud – directors beware!
There has been much mention in the press in recent times about the amount of allegedly incorrect or fraudulent claims made by employers under the Government’s Coronavirus Job Retention Scheme (“CJRS”) (furlough scheme).
Think twice: might the estate be insolvent?
This blog focuses on two practical considerations that should be borne in mind when dealing with an estate where there are any suspicions that the value of the assets when realised may be insufficient to meet all debts and liabilities in full.
Disclosure of documents subject to implied undertakings
The recent case of The Official Receiver v Andrew Nathaniel Skeene and Junie Conrad Omari Bowers [2020] EWHC 1252 (Ch) (“Skeene”) is a good example of the crossover between insolvency related proceedings and criminal proceedings. In this case, the High Court considered the Official Receiver’s (“OR”) ability to disclose to the Serious Fraud Office (“SFO”) documents which had been obtained by the OR during the course of disqualification proceedings.
Insolvency interviews in the context of suspected criminal or regulatory misconduct
Interviews are frequently conducted by office-holders with individuals previously involved with an insolvent company, such as directors and officers, employees, accountants, lawyers and other third parties. Such interviews will often provide key information regarding the company’s trading and dealings and the actions of its directors and employees, thereby assisting office-holders seeking to investigate potential fraud, misfeasance and other forms of misconduct.
Insolvency powers: Section 236 and extra territorial effect
Third parties are often caught (innocently or not) in the cross hairs of office holders seeking information and/or documents on the asset and liability position of a company in order to fulfil their functions properly and their duties to the creditors.
Civil Fraud Quarterly Round-Up: Q2 2020
A Civil Fraud quarterly round-up (2nd quarter 2020)
The emperor’s new clothes or sweeping reform? The Corporate Insolvency and Governance Bill
The Corporate Insolvency and Governance Bill received its first reading in the House of Commons on 20 May 2020, several months after Alok Sharma first announced what we expected to be the biggest changes to insolvency law in decades.
Fraud Unravels All?
In the recent case of Georgallides –v- Secretary of State for Business, Energy and Industrial Strategy [2020] EWHC 768 (Ch), the High Court grappled with the question of how the maxim “fraud unravels all” should apply to disqualification undertakings given pursuant to Section 8A of the Company Directors Disqualification Act 1986 (“the CDDA”).
Civil Fraud Quarterly Round-Up: Q1 2020
A Civil Fraud quarterly round-up (1st quarter 2020)
Liquidation and Fiduciary Duties: No Rest for (the Wicked?) Directors
In Hunt (as Liquidator of System Building Services Group Ltd) v Michie & Ors [2020] EWHC 54 (Ch), ICC Judge Barber has confirmed that directors of insolvent companies remain subject to fiduciary duties, even after those companies enter into an insolvency procedure.