Why the client needed our help
Our client was owed £2.5m from a company which had entered administration. Part of this debt was personally guaranteed by the company’s director.
The director was not delivering up company books and records to the administrator following numerous large and unexplained transactions being made to the director and connected third-parties.
Despite the client demanding payment of the sums due under the PG, payment was not forthcoming.
How we helped
We were instructed to aggressively pursue the director for the amount under the PG. The basis for which would (1) ensure a part recovery of the sums due, and (2) allow a Trustee in Bankruptcy to take control of, and investigate, the transfers made to the director by his company and where those payments went (which assists the administrator’s investigations and increases the prospect of a full recovery for our client).
We issued a bankruptcy petition against the director.
Days before the bankruptcy hearing was due to take place, the debtor confirmed that he was able to make payment within several days. On this basis, the hearing was adjourned by agreement of the parties.
The deadline for payment passed and instead the director filed a Notice of Opposition.
We responded with a robust witness statement explaining that there was no basis for a further adjournment based off the information before us.
The adjourned hearing was heard and contested. The director brought with him previously undisclosed evidence purportedly showing receipt of funds soon to paid to him to clear the petition debt. The Judge afforded the director with one week to file witness evidence to prove that payment could be made within a reasonable time. This lead to the hearing being adjourned for a second time.
Upon receipt of the director’s witness statement, FWJ filed a second witness statement disputing that the information contained in the director’s witness statement was reliable or sufficient.
At the third hearing, FWJ obtained a Bankruptcy Order against the director after the Judge found that there was no evidence that the director could make payment within a reasonable period of time, or at all.
The outcome
A Trustee in Bankruptcy is being appointed to investigate the Bankrupt’s assets to ensure that a full recovery is made to our client. Further, control of the director’s bank accounts will allow the administrator to examine the unexplained company transactions.
