We have offices in Northampton, Banbury, Coventry, Hitchin, Milton Keynes and Spalding

BRI Business Recovery and Insolvency

We are an independent company of insolvency practitioners committed to finding the right solutions for businesses and individuals in financial difficulty

The end of the case is nigh!

The end of the case is nigh!

Our debtor left the country in 1998 some months after the flooding of his principal place of business, in Easter of that year.  He took with him a significant sum of cash and, in anticipation of his departure, had transferred considerable sums of money and land to various pension schemes believing that by doing this they would be safely out of the reach of any Trustee in Bankruptcy were a Bankruptcy to ensue.

The new trading premises were managed by a husband and wife team.  They arrived at work one morning to find a note which said simply “Gone to New Zealand – appoint receivers”.  He was a sole trader.

There are no provisions for the appointment of “receivers” in this situation.  A trade creditor was identified who was sufficiently agitated to help progress matters through what was perceived likely to be the “least bad” way forward. They petitioned for the Debtor’s Bankruptcy and for the appointment of myself as Special Manager.  A Bankruptcy Order was made and shortly thereafter I was confirmed as Trustee in Bankruptcy by appointment of the Secretary of State for Trade and Industry.

While acting as Special Manager the BRI team were able to identify a Bank Account which had been opened in New Zealand by the Debtor.  New Zealand is a commonwealth country with reciprocity arrangements in place in respect of insolvency matters.  An Order in Aid and Mareva Injunction were obtained which resulted in the New Zealand bank account being frozen.  The Debtor, whose intention it had been to purchase a property in New Zealand the following day, was alarmed to find that he could not then do so as his account had been frozen subject to “living expenses” being withdrawn pending the making of a Bankruptcy Order or other order(s).

The Debtor reported the above freezing of accounts to the Auckland police who, in turn, reported matters to Interpol who likewise advised Northamptonshire police who, the following morning, attended at the business premise of the Special Manager to enquire as to what had taken place.  Within minutes they departed shaking their heads and saying “it’s civil”.

As special manager I had agreed the sale of:

  • All stocks
  • The dwelling house (in 1998 for £400,000) (delayed further due to issues with Pension)
  • Some land
  • Funds with third parties were subject to my order
  • Property in New Zealand were subject to a NZ Court Order

 

As trustee there followed a number of Court hearings with pensions companies to unravel the Debtors attempts to put assets “beyond the reach of creditors”.  S423 of the Insolvency Act (Transactions Defrauding Creditors) was used.

Since around 2003 we have been endeavouring, through a series of different solicitors, to deal with two plots of land and a barn whose title has been under some dispute.

The Debtor had been married previously and this marriage had ended in divorce.  The divorce took place following the debtor and his former wife having traded individually and in partnership.  The land that remained to be dealt with, and from which rental income was being earned, was unregistered.  The title deeds were known to have been in the possession of the Debtor’s former solicitors who had dealt with both his property matters and his subsequent divorce.  However, the title deeds were believed to have been collected by the Debtor for reasons which are far from clear but, one might now suppose, may have been to put these assets out of the reach of creditors.

The Debtor has been required to account for what happened with the title deeds and to clear up what may have happened to the property as a result of the divorce from his former wife.  He was unhelpful in both regards including by way of a public examination.

Agents were engaged to trace the former wife.  Upon opening communications, via solicitors (who changed regularly throughout our dealings), it was clear that some compromise/settlement was to be sought given that there was some value in the property and a commercial settlement was likely to be more cost-efficient than trying to obtain determination by the Court.

All evidence lead the Trustee to conclude, given the payment of rental income to the Debtors estate and the absence of any action in respect of the land by the former spouse for some decades, that title had remained with the Debtor.  It was, however, not something that the Land Registry would accept without either the agreement of the former spouse or an appropriate Order of the Court.

Accordingly, and after many years of wrangling, a settlement was reached and a payment has been made to the former spouse for her waiving of any potential interest and a contribution towards her associated legal costs.  My solicitors were put in funds in early January 2014.

Accordingly matters are now drawing to a close.

The Debtor has been very unhelpful throughout these proceedings and appears to have done his best to secure his own financial position at the expense of his creditors.  Whilst there is little doubt that he was in a very poor state of mind in the run up to his insolvency and that his business suffered a natural disaster on Good Friday 1998 (as did ours), through flooding, he has had many opportunities to “do the right thing” but had railed against that throughout.  His pensions’ providers too fought every endeavour to restore funds to the estate and his former wife has done little to assist, with matters exacerbated by numerous changes in which solicitors were acting for her.