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.