Why the client needed our help
We were acting for joint liquidators to pursue a claim against directors of a company for breach of fiduciary duty. The directors were being evasive, both in relation to the claim and their ability to pay sums owed to the company.
How we helped
The directors presented an inability to pay argument, stating that they had no savings and were relying on family and friends to fund a settlement offer. We required the directors to complete a sworn statement of financial position to test the merits of their pleas.
Our standard statement of financial position asks for disclosure regarding cryptoassets held. Upon receipt of the completed statements, the assertion made by the directors of having minimal cash was revealed to be correct, but the statements revealed that the directors held cryptocurrency the value of six digits which they could draw on.
The outcome
Discovery of this information made a significant difference in the negotiation of settlement of the claim and the return to creditors.
Had this question not been asked, the return to creditors would have been significantly lower.
