Home » Testimonials » Insolvency Litigation » £220,000 insolvency claim by the liquidator settled out at £40,000 – a £180,000 reduction. Payment to be made over time

£220,000 insolvency claim by the liquidator settled out at £40,000 – a £180,000 reduction. Payment to be made over time

“I cannot thank you enough for everything you have done for me…..” –  The Details of our Client’s case

Following the liquidation of her company, our client received a letter of claim from the Liquidator claiming in excess of £220,000 in respect of an overdrawn Director’s Loan Account. The Liquidator had conducted a forensic reconciliation of the company bank accounts and identified a number of payments to our client which he alleged ought to be repaid by our client. Our client had initially sought the assistance of the company Accountant to explain she was entitled to retain the monies. Despite lengthy correspondence and the best efforts of the Accountant, the Liquidator was not prepared to accept the explanations proffered.  He was determined to issue proceedings against our client seeking an Order that she repay the £220,000 in full. This is when our Insolvency Litigation Solicitors were contacted, led by Suky Mann. In the end we reduced the insolvency claim by £180,000 – a reduction of over 80%.

Our Insolvency Litigation Specialist Suky Mann took up the fight

At the point when Court proceedings were about to be issued against her, our client sought the advice of senior Insolvency Litigation Solicitor, Suky Mann.

To the inexperienced eye, the facts of the case would suggestion an easy win for the Liquidator. With scores of transfers into our client’s personal bank account, which included transfers marked ‘house deposit’ and ‘school fees’, how could the Director possibly justify such payments?

Suky took up the fight. She was undeterred by the aggressive and unwavering stance of the Liquidator. She immediately began unravelling the transactions with the client and was able to demonstrate that many of the transactions were legitimate. She successfully persuaded the Liquidator  that our client should be entitled to credits for those payments.

Suky was able to demonstrate that the sums due were in fact a far cry from the £220,000 that the Liquidator was claiming. Having brought the Liquidator’s attention to the weaknesses and mistakes in his case, she was able to secure a settlement of £40,000 in full and final settlement of the Liquidator’s claims, payable in instalments over an extended period of time.

Our Client’s Reaction

When Suky informed our client that she had successfully negotiated that settlement, our client was overjoyed and extremely relieved at having avoided expensive and protracted litigation.

When our client made the last instalment payment and the settlement was concluded, he rang Suky and said:

I cannot tell you how grateful I am, I can finally breathe and put this whole mess behind me. You have been fantastic. I cannot thank you enough for everything you have done for me.”

(M.T. Middlesex)

Key points arising from this case

  • This case demonstrates that getting experienced specialist advice is key to reducing or defeating insolvency claims by Liquidators.
  • Financial ruin is not always inevitable.  A fresh pair of experienced eyes, as here, made the difference.
  • Providing detailed explanations and giving context to payments made to the Director and how company monies were properly used, will often lead to the Liquidator abandoning the claim or accepting a commercial settlement on terms favourable to the Director.

If you are a Director facing a potential claim by a Liquidator, then please get in contact with our experienced team of Insolvency Liquidation specialists on 0121 200 7040 or by email to law@ndandp.co.uk.

M.U. Middlesex