Litigation Funding—an Insolvency Practitioner’s perspective

Litigation Funding—an Insolvency Practitioner’s perspective

36757801 - a broke businessman showing his empty pocketMichael Leeds, director, and Nick Wood, partner, of the Fraud Insolvency Division (FInD) of Grant Thornton UK LLP discuss some of the issues insolvency practitioners consider when contemplating the use of funding.

This is part two of a three-part blog series on litigation funding republished with the permission of Vannin Capital. The links to the other articles are provided at the end of the article.

In many insolvency cases there are likely to be limited assets or, in especially desperate cases, no assets at all. So, how can the Insolvency Practitioner (IP) realise value for the creditors if there is a suspicion that assets have been dissipated and there is an angry creditor (or angry creditors) who want their money back?

A number of cases within our FInD portfolio have no assets and yet either fraud is suspected or there may be potential claims against third parties. We are engaged on the following scenarios:

  • assisting with the enforcement of an unsatisfied arbitration award
  • pursuing a former employee who has had their hand in the till
  • acting as a receiver over specific assets
  • assisting a judgment creditor with enforcing the debt
  • pursuing delinquent directors

Usually there are pro-active creditors looking for a route to money where they have been unable to recover anything. They have taken steps to put the company into an insolvency process to enable an investigation to be undertaken and assets recovered using the powers given to the IP under the Insolvency Act 1986.

As set out above it is often the case that an insolvent company will have no assets on its balance sheet and no cash at bank. What the IP focusses on is recovering assets which are off the balance sheet.

Is

Subscription Form

Related Articles:
Latest Articles:

Already a subscriber? Login
RELX (UK) Limited, trading as LexisNexis, and our LexisNexis Legal & Professional group companies will contact you to confirm your email address. You can manage your communication preferences via our Preference Centre. You can learn more about how we handle your personal data and your rights by reviewing our  Privacy Policy.

Access this article and thousands of others like it free by subscribing to our blog.

Read full article

Already a subscriber? Login

About the author: