Liquidators investigating the collapse of a company are not necessarily limited to claims against its former directors. Where the company’s losses may involve the actions of banks, advisers, recipients of company money or other third parties, the liquidators may investigate whether a separate legal claim could increase recoveries for creditors.
A recent High Court decision involving Denaro (UK) Limited provides a useful example.
The liquidators of Denaro are pursuing claims worth approximately £37.8 million against Barclays Bank UK plc. The claims include allegations of dishonest assistance and breach of the Quincecare duty arising from payments made while the liquidators allege that the company was being operated as part of a fraudulent scheme.
Barclays applied to have the claims struck out. The High Court refused that application and permitted amended claims to continue.
Importantly, the decision does not establish that Barclays is liable or that the underlying allegations have been proven. The substantive claims remain to be determined.
For insolvency practitioners and creditors, the case illustrates a wider point. An investigation into the collapse of a company may sometimes identify possible recovery claims against parties beyond the company’s former management.
What claims are the Denaro liquidators bringing against Barclays?
Denaro (UK) Limited was placed into liquidation in November 2023.
Its liquidators subsequently began proceedings against two former directors and Barclays Bank UK plc.
The liquidators allege that Denaro and an associated business had been operated as a Ponzi scheme from 2013 onwards. Those allegations remain contested and have not been determined at trial.
Against Barclays, the liquidators are pursuing claims relating to payment instructions executed between May 2013 and August 2023. The amount claimed is approximately £37.8 million.
The claims include allegations of dishonest assistance and breach of what is commonly known as the Quincecare duty.
Barclays applied to strike the claims out, arguing that they were legally or factually insufficient to proceed.
In Denaro (UK) Ltd v Bracken & Ors [2026] EWHC 2266 (Ch), the High Court concluded that, subject to amendments to the pleadings, the claims were sufficiently viable and particularised to continue towards trial.
That is an important procedural outcome, but not a determination of liability.
The liquidators still need to establish their claims on the evidence.
When can liquidators pursue third parties after a company becomes insolvent?
A liquidator’s role includes investigating the company’s affairs and identifying assets or claims which may be capable of producing a return for creditors.
Often that investigation focuses initially on the company’s own records and the conduct of former directors.
However, it may reveal transactions involving other parties.
Depending on the circumstances, potential claims might involve banks, professional advisers, recipients of company property, contractual counterparties or people alleged to have assisted breaches of duty or other wrongdoing.
The existence of a relationship with the insolvent company is not enough by itself.
A liquidator needs to identify a recognised cause of action and evidence capable of supporting it. Commercial considerations will also matter, including the likely value of the claim, legal costs, available funding, the prospects of success and whether a successful judgment is likely to result in an actual recovery.
FWJ’s Defending Liquidator Claims Guide explains the more familiar claims which can arise following insolvency, particularly where former directors are under investigation.
For office-holders looking at recovery more broadly, our debt recovery services for insolvency practitioners consider how recoveries can be pursued for the benefit of an insolvent estate.
What is a dishonest assistance claim?
Dishonest assistance is an equitable claim which can arise where a person dishonestly assists another person in a breach of trust or fiduciary duty.
- The precise legal requirements are important. A third party does not become liable simply because it dealt with somebody who later turns out to have acted improperly.
- The claimant must establish the necessary underlying breach, assistance and dishonesty.
In the Denaro proceedings, the liquidators’ dishonest assistance case includes allegations concerning the conduct and knowledge of a former bank relationship manager.
Those allegations have not yet been determined.
The High Court’s September 2026 decision concerned whether the pleaded case was sufficiently viable to continue, rather than whether dishonest assistance had actually occurred.
That distinction is particularly important in fraud litigation.
Applications to strike out a claim may determine whether allegations can proceed through the court process. They are not the same as a trial at which the court decides whether those allegations are ultimately proved.
Where proceedings do develop, the wider rules governing commercial litigation claims become relevant, including pleadings, disclosure, witness evidence, interim applications and eventually trial.
What is the Quincecare duty and why can it matter in an insolvency?
The Quincecare principle concerns circumstances in which a bank receives a payment instruction from an authorised agent acting on behalf of its customer.
Following the Supreme Court’s decision in Philipp v Barclays Bank UK Plc, the relevant issue can arise where circumstances known to the bank would cause a reasonable banker to suspect that the agent giving the instruction is acting dishonestly and without authority.
In that situation, a duty to make enquiries before processing the payment may arise.
The Denaro liquidators allege that circumstances surrounding certain payments should have caused Barclays to make enquiries.
Again, that allegation remains unresolved.
The case does not establish that a bank becomes responsible whenever a director makes an improper payment from a company account.
The legal question is considerably narrower and depends on the nature of the instruction, the authority of the individual giving it and the circumstances apparent to the bank at the relevant time.
For liquidators, however, the existence of a potential bank claim may be significant where large amounts of company money were transferred before an insolvency and there is evidence suggesting that another party may have owed a relevant legal duty.
How do liquidators decide whether a third-party claim is worth pursuing?
Identifying a possible legal claim is only one part of the process.
A liquidator will usually need to consider the available evidence, the legal basis of the claim and the likely commercial outcome before committing an insolvent estate to substantial litigation.
That may involve reviewing bank statements, contracts, correspondence, electronic communications, accounting records and documents obtained from third parties.
The liquidator may also need to establish what loss the company itself suffered and how that loss was caused by the conduct complained of.
Recoverability matters as well.
A legally strong claim against a defendant with no meaningful assets may offer creditors little practical benefit. Conversely, a substantial claim against a solvent third party may justify detailed investigation where the evidence supports it.
This is why asset recovery and litigation strategy should be considered together.
FWJ has acted for insolvency practitioners in assessing potential claims where the crucial question was not simply whether a cause of action existed, but whether pursuing it was likely to produce a worthwhile return for the estate. Our case study on assessing potential insolvency claims illustrates that commercial distinction.
Where there is also a concern that assets may be dissipated before the proceedings can be resolved, an applicant may need to consider whether protective court relief is justified.
Our Freezing Orders Guide explains how freezing injunctions can be used in appropriate cases to preserve assets pending the outcome of litigation.
Does a failed strike-out application mean the third party is liable?
No.
This is one of the most important points arising from the Denaro decision.
The High Court dismissed Barclays’ strike-out application and allowed the liquidators’ amended claims to continue. It did not decide that Barclays had dishonestly assisted the alleged wrongdoing or breached the Quincecare duty.
Those matters remain to be tried.
A strike-out application is concerned with whether a claim should be prevented from continuing without a full trial. Depending on the application, the court may consider whether the pleaded claim discloses reasonable grounds, whether it is an abuse of process or whether another procedural basis exists for bringing it to an end.
A claimant surviving that stage has therefore preserved the opportunity to pursue its case. It has not necessarily proved it.
The distinction applies equally to insolvency litigation involving directors and third parties.
Early procedural decisions can be commercially significant, particularly because they affect whether the parties must continue incurring the costs and risks of litigation. They should not, however, be reported as final findings on liability.
Businesses defending substantial proceedings can read our guidance on defending commercial litigation claims for more information about the stages and strategic decisions which may arise after a claim has been issued.
What does the Denaro decision mean for creditors and insolvency practitioners?
The wider lesson is that an insolvent company’s potential assets can include legal claims.
Where a company’s money has been lost through alleged fraud or misconduct, the investigation should not necessarily stop with the individuals said to have caused the immediate loss.
Other parties may have received assets, assisted relevant conduct or owed duties which require investigation.
That does not mean that claims should be brought speculatively.
The legal basis, evidence, value and likely recovery all need to be considered carefully.
For creditors, successful third-party claims can potentially increase the funds available in the insolvency estate. They can also take substantial time and involve significant litigation risk.
For liquidators, the challenge is therefore both legal and commercial: identifying claims worth pursuing while avoiding expensive proceedings which offer little realistic benefit to creditors.
The Denaro litigation remains ongoing. Its significance at this stage is that the High Court has permitted the claims against Barclays to continue, giving the liquidators an opportunity to attempt to establish their case at trial.
It is not yet known whether they will succeed or what, if anything, will ultimately be recovered.
