Case Studies

CASE STUDY 1

Unlawful Dividend Claim

We were approached by a liquidator about a potential unlawful dividend claim with limited time before the relevant limitation period expired. Within that time we reviewed the case, made an offer to purchase the claim and had issued proceedings.

We conducted a thorough investigatory process, which not only served to substantiate the unlawful dividend claim – but also identified serious wrongdoing in the form of fraudulent conduct by the former directors of the company.  

It’s often thought that ‘smoking guns’ are a cliché – but in this case our internal team working alongside the liquidators found precisely that:  a document proving that the liquidators had been provided with accounts which had been doctored ex-post facto. The document enabled us to re-perform the company’s audit and prove that certain documents were not contemporaneous.

Our analysis proved instrumental in securing a multi-million-pound settlement at mediation within a year of the original assignment. This settlement increased the dividend available to unsecured creditors by 20 times the originally anticipated level.

Our analysis proved instrumental in securing a multi-million-pound settlement at mediation within a year of the original assignment. This settlement increased the dividend available to unsecured creditors by 20 times the originally anticipated level.

CASE STUDY 2

Transaction Defrauding Creditors

H&J purchased a claim against four defendants (A & B and X & Y) who were the former shareholders and directors of a company that had been placed into liquidation. The investigatory work of the insolvency practitioner revealed that some £1.6m had been taken out of the company without clear justification and which left very significant creditors outstanding.

We retained the services of the incumbent solicitors appointed by the insolvency practitioners from whom we purchased the claim. They identified significant property interests held by the defendants which had been purchased using company funds. X&Y initially denied the claims brought but subsequently settled their claim by returning the unencumbered property to the company – which we sold via a local agent to achieve a return for creditors.

A&B proceeded to sell their largest property interest – to do so they both lied to their solicitors and breached undertakings.  Upon discovery (some 24 hours later) we obtained a freezing injunction against A&B which was served on their banks and solicitors.  

A&B left the country, lied to the court about their assets and moved money across their family network to avoid the freezing order. H&J served criminal proceedings for contempt of court out of the jurisdiction and the two defendants were found guilty.  

H&J at the same time pursued a claim pursuant to section 423 of the Insolvency Act 1986 – claiming that the transaction by which A&B had sold their property was a transaction to defraud creditors. We reached settlement with the purchaser of the property resulting in a further return for creditors. A&B are now bankrupt and hold criminal records. We developed a strong working relationship with the incumbent solicitors on this case and have proceeded to instruct them on several new cases since.

CASE STUDY 3

Breach Of Contract Claim

The liquidators of an engineering company identified a potential breach of contract claim worth up to £50,000.  The claim was complicated and relied heavily on expert evidence.  The liquidators had therefore intended to drop the claim as the costs of running it were deemed to be prohibitive and disproportionate.  Instead, we purchased the claim for a nominal sum but on the basis that we would share the proceeds of any successful outcome with the insolvent estate.  

The insolvent company was engaged in the supply and installation of plumbing, heating, cooling and ventilation systems and engaged a sub-contractor to provide certain technical services in connection with a project.  The services were not provided to the standards specified in the contract and caused certain components to fail.  

Upon assignment our in-house team invested time and resource in developing the case and identified that the loss and damage suffered by the company was in fact greater than previously anticipated and totalled approximately £200,000.    

Our in-house team of litigators ran the case, working alongside external counsel to enable significant costs savings and managed to negotiate a settlement of £180,000 plus costs. H&J’s purchase of the claim substantially increased returns for creditors.

The liquidators had intended to drop the claim as the costs of running it were deemed to be prohibitive and disproportionate. Instead, we purchased the claim... our in-house team invested time and resource in developing the case... and managed to negotiate a settlement [which] substantially increased returns for creditors.

CASE STUDY 4

Director’s Loan Account

A director of an insolvent company had removed hundreds of thousands in unapproved expenses from the company – while leaving around 30 to lose their jobs.  

H&J purchased the claim against the director outright as the appointed insolvency practitioner was keen to dispose of the claim in its entirety; as the insolvency was due to be closed and the insolvency practitioner was keen to avoid legal costs eating into recoveries.  

The director held a low-value property asset with estimated equity of around £50,000. Our in-house team identified that the director had not in fact incurred the vast majority of the expenses he had claimed. In particular, it appeared he had fraudulently been claiming the costs of first-class travel when, in fact, travelling in standard class or not at all.  

H&J brought a claim for repayment of an outstanding director’s loan account. The director claimed that he couldn’t afford to repay and would instead become bankrupt. We made maximum use of our in-house team to reduce legal costs incurred. We even utilised the advocacy skills of Philip Henderson (who has higher rights of audience) and successfully obtained judgment and an order for indemnity costs following a one-and-a-half-day trial.  

On receipt of the judgment the director applied for his own bankruptcy. We requested that the appointed be transferred from the Official Receiver and through the bankruptcy process creditors received a small dividend.

CASE STUDY 5

Transaction At An Undervalue

H&J purchased a claim against two directors who had purchased the entire share capital of a subsidiary of an insolvent company. The directors claimed that they had paid approximately £110,000 for the shares – which had been purchased by the insolvent company a year earlier for £150,000.  

The form of consideration allegedly provided was complex and the claim appeared to hold relatively low value (of up to £40,000 – being the difference between the two purchase prices).  The liquidators had therefore resolved that they were unwilling to bear the cost and risk of taking the claim forward. We purchased the claim and designed a bespoke structure for the assignment to ensure that creditors would receive a dividend irrespective of the final result (provided it was above zero!).  

Our in-house team conducted detailed forensic investigatory work and engaged in pre-action correspondence with the directors. Our investigations identified that the directors had fabricated certain documents submitted to the liquidators in an attempt to substantiate their claim to have paid £110,000 for the shares. They had, in fact, paid nothing!  

H&J asserted claims in fraud and produced the evidence of our investigations – including computer forensic analysis of the metadata contained within certain electronic documents. Within nine months of H&J’s assignment the defendants settled following mediation – resulting in payment of almost the entire value of the claim.

Our in-house team conducted detailed forensic investigatory work and engaged in pre-action correspondence with the directors. Our investigations identified that the directors had fabricated certain documents submitted to the liquidators in an attempt to substantiate their claim to have paid £110,000 for the shares. They had, in fact, paid nothing!

“H&J takes time to understand our value drivers and works with us constructively to achieve our objectives against the statutory framework of an insolvency process.”

Partner —  PwC LLP

“Determined, creative and commercially-minded litigators. Good team-players, great to work with and very effective with all stakeholders.”

Partner — Freshfields Bruckhaus Deringer LLP

“We have had three excellent results to date with H&J resulting in recoveries of over £4m.”

Partner  —  ReSOLVE GROUP

“H&J made good recoveries for us on a number of smaller value claims where the cost of realising value would otherwise have been disproportionate.”

Partner  —  FRP Advisory

“"H&J has helped us with a couple of high-risk and complex matters across a range of values and involving overseas enforcement in challenging jurisdictions.”

Partner  —  PWC LLP

“"H&J really throw themselves into the case and their legal and insolvency backgrounds means they are very well placed to litigate effectively and work efficiently with our team.”

Partner  —  ReSolve Group
Latest Posts

News and Insights

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News / Press Releases

H&J secures recovery of £7m for victims of fraud

H&J has secured the recovery of more than £7m for victims of fraud pursuant to a judgment handed down on 5 January 2024.
Feb 1, 2024
Piers Elliott
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News / Press Releases

Daren Hlaing joins H&J as Legal Director

Daren Hlaing has joined H&J as a Legal Director in our London Office. Daren specialises in insolvency, financial services and professional negligence claims.
Jan 25, 2024
Gwilym Jones
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News / Press Releases

Piers Elliott promoted to Managing Director

We are delighted to announce the promotion of Piers Elliott to Managing Director.
Jan 1, 2024
Philip Henderson

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