In August 2020, H&J settled two mid sized cases in relatively quick succession. These cases achieved a total return to the insolvent estates of over £1.5 million - all of which was received in cleared funds within 30 days. We wish to share these examples as they are very different but also very typical of the cases we work on.
CASE 1 - illegal dividends, misfeasance, negligence, dishonest assistance
This claim was against a group of directors, shareholders and advisors of a company in liquidation for transferring the trade and assets of a non performing business with onerous leases at an undervalue to a newly incorporated sister company. The intention being to avoid the company's landlord creditors. The sister company began trading the insolvent entity's business and made healthy profits. H&J issued proceedings, completed pleadings and obtained an expert valuation of the trade and assets transferred. Settlement was negotiated shortly after virtual mediation based on the total undervalue of the transfer.
The office holder said: "A truly exceptional result. Congratulations to you and all the team and with many thanks from us - just fantastic" The case was purchased in 2018 from a company in liquidation.
CASE 2 - claims under property damage and business interruption insurance policies
H&J took an assignment of the benefit of certain insurance policies held by a company which had experienced significant property damage as a result of an arson attack at its premises. The company had submitted a significant insurance claim which had been rejected by insurers on the basis of coverage issues. The parties engaged in extensive pre-action correspondence without success before the claim was assigned to H&J.
Upon our assignment we conducted investigations into the factual matrix behind the claim and instructed an expert to prepare a report valuing the losses suffered by the company. Shortly before issuing the claim we served the expert report on the defendant insurer and offered a final opportunity to engage in without prejudice discussions prior to the issuance of proceedings. We successfully negotiated a settlement shortly after a virtual mediation between the parties.
Our introduction to the litigation as a claimant with a sophisticated in-house litigation team and significant cash reserves demonstrated to the defendant that this case would go the distance if it was not settled. We purchased this case in 2020 from a company in a company voluntary arrangement.
Both cases highlight how litigation can unfold and why we structure our purchases in a way to encourage early settlement but also to reflect the investment required for taking cases to trial.
We would like to thank BDO and FRP for their referrals, our legal teams Chris Love of Primus Law, Jane Hobbs of Gateley Plc, James Morgan QC of St Phillips Chambers, Peter MacDonald Eggers QC of 7KBW and Simon Passfield of Guildhall Chambers and our experts Nicholas Parton of Opus Pear Tree Ltd and Richard Henton of South Hills Consultancy.
