A recent High Court decision concerning companies connected with collapsed bridging lender Market Financial Solutions Limited provides a useful illustration of how insolvency practitioners can investigate and preserve assets where company funds are alleged to have been diverted.
The proceedings concerned Twinwin Limited, a separate company which was alleged to have been inserted into lending arrangements involving MFS-related entities. On 6 March 2026, the High Court appointed provisional liquidators after concluding that there was a serious risk that Twinwin’s assets could be dissipated and no other immediately available method of securing them.
The court also found that the applicants had good arguable claims involving knowing receipt and dishonest assistance. These were findings made for the purposes of an urgent provisional liquidation application, not a final trial determining liability.
Twinwin has since entered compulsory liquidation. Companies House records the commencement of its winding up as 18 June 2026.
For insolvency practitioners, creditors, directors and third parties, the proceedings show why reconstructing the movement of company money can become a central part of an insolvency investigation.
What did the High Court find in the Twinwin proceedings?
The case arose against the background of the collapse of MFS and companies involved in its lending and securitisation arrangements.
The High Court considered evidence that Twinwin had been inserted between an MFS-related lender and underlying borrowers.
- One transaction showed £3,234,106 being paid to Twinwin rather than directly to the underlying property owners.
- The court recorded that Twinwin appeared then to have lent the money onwards under a separate agreement carrying a higher rate of interest and an additional intermediary fee.
- The evidence before the court indicated that Twinwin’s involvement had not been disclosed to the MFS-related lender.
The court also considered a partial redemption of one of the relevant properties. On that occasion, £608,786 was paid to Twinwin. There was no evidence before the court that the money had subsequently been paid to the relevant MFS-related lender or into the account in which collections were supposed to be held.
In considering the application, the judge described this as demonstrating an actual diversion of monies away from the relevant lender to Twinwin.
The court concluded that there was a serious risk of dissipation and appointed provisional liquidators. The Gazette confirms that the appointment took effect on 6 March 2026.
Those findings need to be understood in context. The court was determining whether the circumstances justified an urgent provisional insolvency appointment. It was not conducting a final trial of the allegations against Twinwin or other parties.
The claims for knowing receipt and dishonest assistance therefore remain distinct from a final finding that those causes of action have been established.
How do insolvency practitioners trace allegedly diverted company funds?
When administrators or liquidators take office, one of their tasks can be to understand what happened to company assets before the insolvency.
That can require considerably more than reviewing the company’s latest accounts. An insolvency practitioner investigating suspicious payments may need to reconstruct transactions using
- bank statements,
- loan agreements,
- accounting records,
- security documents,
- Land Registry information,
- emails; and
- correspondence between the businesses involved.
The objective is to establish the commercial substance of the transaction.
For example, if company records show that £1 million should have been transferred to one party but banking information shows that it went somewhere else, the next questions are likely to include why that happened, who authorised it, what the recipient understood the payment to represent and what happened to the funds afterwards.
Insolvency practitioners also have statutory information-gathering powers and can require relevant people to provide information and co-operate with their investigations.
Our asset tracing and recovery service for insolvency practitioners explains how investigations can involve locating, identifying, preserving and recovering assets where transactions have become difficult to unravel. FWJ’s insolvency team regularly deals with cases involving fraud allegations, complex transfers and assets held by third parties.
Following the movement of money does not, however, answer every legal question.
An insolvency practitioner may be able to show that money moved from Company A to Company B, but that does not automatically establish that Company B must repay it.
The legal basis for recovery must still be identified.
What claims can follow an investigation into diverted funds?
There is no single legal claim used whenever company money appears to have been diverted.
The appropriate cause of action depends on what the investigation establishes.
The Twinwin proceedings provide two examples.
- The court concluded that the applicants had a good arguable claim in knowing receipt and
- good arguable personal claims based on dishonest assistance for the purposes of the provisional liquidation application.
Knowing receipt can arise where a person receives trust property in circumstances which make it unconscionable for them to retain the benefit of it. Dishonest assistance concerns assistance provided in connection with a breach of trust or fiduciary duty where the required dishonesty is established.
Neither remedy applies simply because money has been received.
Other insolvency investigations may result in very different claims.
Where a director is alleged to have misused company property or breached duties owed to the company, a liquidator may consider a misfeasance claim. Our guide to misfeasance claims against directors explains how such claims can arise following an investigation into company money, assets and management decisions.
Transactions entered into before formal insolvency may also need to be considered under the statutory antecedent transaction regime, including transactions at an undervalue or preferences where their respective requirements are satisfied.
Other cases may involve breach of contract, recovery of debts, breach of trust or proprietary and tracing claims.
This is why identifying suspicious payments is only the beginning. Office-holders must also decide whether a viable claim exists and whether pursuing it makes commercial sense.
FWJ has acted for insolvency practitioners carrying out precisely that exercise. In one review of potential claims against company directors, potential claims were identified but evidential gaps meant litigation was unlikely to produce a worthwhile recovery. That distinction between identifying possible wrongdoing and establishing a commercially viable claim is an important part of insolvency practice.
When can provisional liquidation be used to protect assets?
Provisional liquidation is an exceptional interim remedy.
Under section 135 of the Insolvency Act 1986, the court may appoint a provisional liquidator after a winding-up petition has been presented but before the petition is finally determined.
The High Court emphasised in the Twinwin proceedings that the power is a serious intrusion into the affairs of a company and that alternative ways of obtaining the necessary protection should be considered.
In this case, however, the court considered that urgent intervention was justified.
It found a serious risk of dissipation and concluded that there was no other immediately available and appropriate method of securing the relevant assets.
The provisional liquidators could therefore take control within the terms of the court order while the underlying winding-up proceedings continued.
This can be particularly important where insolvency practitioners or creditors believe that assets may disappear before an ordinary winding-up petition can be heard.
It should not be assumed that provisional liquidation will be available whenever there are disputed transactions. The court will consider the strength of the case for winding up, the evidence of risk, proportionality and whether another remedy could adequately protect the position.
The Twinwin case provides an example of the remedy being used where the court considered the evidence of fund movements and dissipation risk sufficiently serious to justify immediate independent control.
What should directors and third parties do if an insolvency practitioner questions past payments?
Contact from an administrator or liquidator about historic payments does not itself establish liability.
Transactions which appear unusual when viewed after an insolvency may have a legitimate commercial explanation.
Directors and recipients of funds should therefore identify the documents which explain what happened rather than responding from memory alone.
Contracts, invoices, board minutes, banking records, correspondence and evidence of consideration provided can all be significant.
For directors, decisions made when a company was experiencing financial pressure may also be examined in the context of their duties at the time. The quality of contemporaneous records can therefore become important if an office-holder later questions why money was transferred, why a particular creditor was paid or why an asset was dealt with in a particular way.
For third parties, the central questions may be different. A recipient may need to establish why it received the funds, what it knew about their source and what value it provided.
The fact that money passed through a particular company’s bank account does not by itself establish wrongdoing by the bank or any other intermediary.
City A.M. subsequently reported that NatWest provided Twinwin’s day-to-day banking facilities. The reported existence of that banking relationship is not a finding that NatWest participated in the alleged diversion of funds.
An insolvency investigation should therefore distinguish between tracing the route taken by money and proving legal liability against those involved in that route.
Where a claim is supported by the evidence, the potential recovery must also justify the cost and risk of litigation. Insolvency practitioners frequently operate within estates where funding is limited, meaning that commercial recoverability matters alongside legal merit. Our guidance on funding insolvency practitioner claims considers this issue in more detail.
The MFS and Twinwin proceedings illustrate how rapidly an insolvency investigation can move when substantial sums appear to have been redirected and assets may be at risk. They also demonstrate the importance of keeping provisional findings separate from final liability.
For insolvency practitioners, the task is to reconstruct what happened, secure assets where necessary and identify claims that are both legally sustainable and commercially worthwhile.
