Insolvency case studies

VWV assisted 2 former directors of a construction company following its financial downturn and subsequent liquidation. After reviewing the transactions in the lead up to the company's insolvency, the liquidators advanced claims against the directors for over £300,000 based on alleged acts of misfeasance, unlawful dividend payments to its shareholders and the preferential treatment of their own liabilities over those of third party creditors.

How Did We Help?

We carefully considered the financial history of the company, the circumstances which caused the company’s downturn, advised the directors on the prospects of successfully defending the threatened claims and prepared a detailed letter of opposition. After a period of further correspondence, we successfully negotiated a settlement with the liquidators.

The negotiation process on this matter was complicated by the directors' financial position which meant that settlement payments needed to be staged. Despite his initial opposition to this, we were able to convince the liquidator to accept payments by instalments. We were also able to negotiate subsequent extensions of time when the agreed payment dates could no longer be met.

Based on our experience of opposing liquidator claims and understanding how a liquidator is likely to approach these types of cases, we were able to get the directors into a position where (despite a relatively weak defence to the majority of the claims advanced) they paid a fraction of the amount that was initially claimed.

VWV assisted a former director of a company which had entered insolvency and who was facing claims from a number of trade suppliers under personal guarantees entered years earlier.

At the time of our instruction a statutory demand had been served by one of the trade creditors and, in the absence of a settlement, a bankruptcy petition had been issued with a hearing listed for the following month. In that period of time, and despite there being no defences available to this particular client, we were able to position him so he paid approximately 70% of the amount claimed, with no contribution towards the creditor's legal costs. Importantly, the dismissal of the bankruptcy petition was obtained which meant the client could avoid bankruptcy. Following this, we were also able to reach reduced settlements with the other trade creditors who were threatening to pursue the director and obtain judgment for the sums due.

How Did We Help?

Our experience in dealing with these types of matters allowed us to act quickly to avoid the terminal bankruptcy of our client which would have been catastrophic for his career and family. The reduced settlements reached with each of the trade creditors also saved our client thousands of pounds.

VWV acted for directors of a family business following its liquidation, all of whom continued to work as part of a second and connected company. Based on the report filed by the liquidator, disqualification proceedings were taken against the entire family. If successful, the outcome of these proceedings would have been that the family would not have been able to continue with their other business and their livelihoods would have suffered.

How Did We Help?

We assisted our client in defending the claim and prepared a detailed defence to the proceedings. Shortly after receipt of this defence, the disqualification proceedings were withdrawn. As a result, we were the able to successfully recover a sizeable contribution towards our client's costs associated with defending the claim.

VWV acted for the debtor company in relation to a winding up petition which has been presented against it in relation to a disputed debt.

It was the company's position that the petitioner did not provide the services that it was supposed to and therefore the amounts payable are in dispute. As such, it was inappropriate for the petitioner to present the debtor company with a winding up petition.

How Did We Help?

We assisted our client with representation at a hearing, drafting witness statements and compiling exhibits demonstrating the dispute in compliance with various earlier court orders made prior to our involvement. We were able to use our knowledge of insolvency procedure to assist our client in applying to dismiss the petition and adequately show the dispute between the parties.

This matter demonstrates the ability of the team to advise on matters arising prior to formal insolvency and our use of insolvency process and legislation to assist our client's position.