We were instructed to act for a liquidator in pursuing the directors of a company for misfeasance and wrongful trading. The directors claimed that they did not realise that liquidation was inevitable until shortly before they sought advice from an insolvency practitioner. As such they denied any liability for wrongful trading. However, it became clear that the directors (one of whom was a qualified accountant) had grossly overvalued the stock in the company's accounts over a number of years such that if accurate figures were substituted it became clear that the company had been balance sheet insolvent for a number of years. We sent a detailed letter of claim to the directors as a result of which the parties agreed to mediate and settlement terms were agreed.
We were instructed by an Insolvency Practitioner who had been appointed Trustee in Bankruptcy of an uncooperative bankrupt. Prior to the Trustee's appointment the bankrupt had given an undertaking to the court pursuant to a public examination to deliver up all documentation, books and records pertaining to his financial affairs. The debtor had not complied with the undertaking and we therefore advised the Trustee to assist the Official Receiver to restore the public examination rather than incurring costs in applying for a private examination. The restoration of the public examination directly resulted in the uncovering of overseas assets and we assisted the Trustee in recovering and realising those assets for the benefit of the bankruptcy estate.
We were instructed by an Administrator to advise on an ROT claim he had received from a creditor in relation to a large proportion of the company's stock. The ROT clause purported to create an "all monies clause" which in other words meant that title to the goods supplied would not pass to the buyer until all of the monies owing to the seller were paid in full. Case law has shown that an "all monies" clause is unlikely to be effective in the context of an agreement to supply finished goods for immediate resale and it was clear that in this case the "all monies" clause clashed with the revolving nature of the stock supplied. We advised that if the clause was ineffective then it could be severed from the contract terms. Further, because the "all monies" clause was part of the substantive ROT clause then any severance of the "all monies" clause would also sever the ROT clause. Our starting point therefore was that the goods supplied were not subject to ROT at all which enabled the IP to negotiate with the supplier on extremely favourable terms.