Members of the Armstrong Watson forensic team have considerable experience in dealing with insolvency related litigation. In particular, Liesel Annible spent seven years specialising in work relating to insolvent companies. This included 18 months at the Insolvency Service Division of the DTI (now BEIS) where she was responsible for investigating the roles of directors in relation to insolvent companies, leading to prosecutions and disqualifications.
This experience means that we are able to assist insolvency practitioners in bringing claims and also help directors and companies in defending them. The knowledge we have gained from working on behalf of both claimants and defendants enables us to view the evidence from all perspectives, giving us valuable insight into potential issues before they arise.
Our experience includes cases involving:
- Fraudulent and wrongful trading
- Transactions at an undervalue
- Preferences
- Transactions defrauding creditors
- Director prosecutions and disqualifications
- Insolvent law firms
- Long firm fraud
- Phoenixism
- Whether companies were solvent at various key dates
The nature of insolvency related cases means that often significant amounts of evidence and documentation are missing. This means that a more flexible and wider-thinking approach has to be adopted when trying to establish the facts of the case and identify relevant evidence.
It is also often necessary to start with third party records, the authenticity of which cannot be disputed by the parties. As a result, significant reliance is often placed upon bank statements and we have specialist software for converting these into electronic format to allow us to readily analyse the transactions.
Insolvency related matters often involve complex financial issues and we have extensive experience of presenting these matters to the Court in a manner which is readily understandable.
A full synopsis of our experience in insolvency matters is available on request, but we have set out overleaf a number of case studies detailing matters in which we have been involved.
If you would like to find out more about how we are able to assist you, please get in touch.
Contact our Forensic accounting team on 0808 144 5575 to discuss how we can help you.
Case Studies
Insolvent companies misappropriating funds from family trusts
We investigated the alleged misappropriation of over £2 million from a number of family trusts where the funds appeared to have been used to support a number of failed business enterprises as well as significant levels of family expenditure. We utilised our specialist bank statement scanning software to produce a database of thousands of bank transactions covering more than 20 years. The database was then used to identify the source of funds utilised by the companies and individuals, and the ultimate destination of the payments. This analysis then formed the basis of claims against the relevant individuals.
Providing an opinion on when a director knew or should have known that a company was insolvent
We regularly provide an opinion as to when a director should have been aware that a company became insolvent within the context of our litigation or criminal cases as well as within insolvency matters. We recently provided a report in relation to a director who faced a multi-million pound claim from liquidators regarding allegations that he should have known that his company was insolvent and therefore should have ceased to trade much sooner. The case involved the alleged breach of a number of loan-to-value covenants given to a bank. Our report was instrumental in achieving an early settlement of the claims.
Investigating phoenix companies
We are often instructed to consider the circumstances in which directors have set up alternative companies to which customers/clients, suppliers and other assets are transferred in anticipation of their original business being placed into formal insolvency proceedings. In such cases the directors have often left debts to HMRC and/or financial institutions that cannot be repaid. Using the transactions on the bank statements in conjunction with the companies’ records we have been able to demonstrate how the trade of the business has passed to one or more phoenix companies over time.
