HomeCase studiesSMEs, directors & shareholdersDirector servicesNegotiating a liquidator claim to a third of its value

Why the client needed our help

Our client approached us after receiving a letter of claim for approximately £90,000 from the liquidator of their insolvent company. The claim was divided into two parts: firstly, alleged unlawful distributions made by the client, and secondly, the sale of company assets by the client and their co-director, which, according to the liquidator, failed to benefit the company.

How we helped

Upon being instructed, our first step was to contact the solicitor representing the liquidator to request more time to respond to the claim, securing an additional four weeks to prepare a robust defence. Our client faced serious allegations, but we crafted a comprehensive response challenging the asset sale (which was actually conducted by the co-director), highlighting the lack of detail in the claims, and pointing out mitigating factors such as the client’s entitlement to compensation and the potential for relief under section 1157 of the Companies Act 2006.

The outcome

After a period of a few months, the liquidator’s solicitors responded to contest our client’s arguments. At this juncture, our client’s financial situation had deteriorated further, prompting us to enter into without prejudice negotiations. These negotiations successfully reduced the claim to a little over a third of its original value, with our client being given just over a year to make the payments. This outcome provided our client with much-needed relief and the opportunity to move forward from this challenging situation.

FWJ were very hands-on, getting involved from an early stage in seeking to avert an expensive set of litigation proceedings. I am more than happy to recommend their services, particularly when it comes to considering complicated issues or complex proceedings.

A client who was facing a liquidator claim for the improper withdrawal of sums from a company. We had the claim dismissed

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