Why the client needed our help
We acted for the joint administrators of a company established as a special purpose vehicle for the acquisition of a business providing independent financial advice. The acquisition was partly funded by a secured lender, which advanced approximately half of the purchase price.
Following a default under the lending arrangements, the secured lender exercised its rights under a floating charge and appointed administrators. After their appointment, the administrators were faced with a series of claims and applications brought by the company’s former director, who was acting as a litigant in person.
The volume and nature of the proceedings created a real risk of disruption to the administration and threatened the administrators’ ability to realise value for the benefit of creditors.
How we helped
We were instructed to defend the administrators against multiple claims, with further applications being issued as the matter progressed. The claims included allegations of misfeasance against the administrators and assertions that shares in the subsidiary were held on trust through an offshore structure.
We took a strategic and robust approach to defending the claims, addressing each allegation in turn and challenging their legal and evidential basis. The matter culminated in a full-day hearing in the High Court, where we argued that the claims were entirely without merit and amounted to an abuse of the court process.
The outcome
The High Court struck out all claims in their entirety. The Court also granted an extended civil restraint order against the former director and ordered him to pay the administrators’ costs.
The civil restraint order prevents the claimant from issuing further proceedings without the permission of the Court, providing important protection against continued disruption.
As a result, the administrators are able to proceed with the sale of the shares in the subsidiary and continue the administration with a clear focus on maximising returns for creditors.
