Insolvency and Financial Defence

Navigating situations involving financial distress such as insolvency cases can be extremely challenging, both commercially and personally. The legal considerations are technical, so we recognise that there is a need for pragmatism, creativity, and at all times common sense. We are a team of collaborative, highly experienced specialists, recognised for our dynamic and progressive approach.  

Where other teams may be generalists, we focus on the disputes that arise from financial distress. Our lawyers form part of one of the largest litigation teams in London and they are familiar with running complex commercial disputes and fraud cases, often with an international dimension.

We have a depth of experience providing insolvency advice to individuals, creditors and the insolvency practitioner community, enabling us to see disputes from all sides and form our strategies accordingly.

We think around your problem to propose solutions that other insolvency lawyers may not consider. In addition to our injunctive expertise, we can call on the experience of asset recovery, cyber, business crime and other specialist colleagues to build a solution that is creative and tailored to your needs. We frequently use freezing orders, search and seize orders and disclosure orders to help you achieve your objectives. Our work is underpinned by our in-house investigatory and eDiscovery capabilities. 

We are not constrained by commercial ties to large institutional clients; Mishcon de Reya is one of the largest independent firms able to act against financial institutions and accountancy firms. 

Matters of financial distress can be complex and stressful. We make your problem our own and we don’t rest until it’s resolved.

Services

We act for companies that encounter financial challenges, as well as the directors, shareholders and other related parties who may be involved. Likewise, we advise individuals experiencing personal financial difficulty, as well as the family members and business associates who may also be affected by the circumstances.

  • We have a wealth of experience defending claims brought by insolvency practitioners, including actions brought under the insolvency legislation - for example, claims involving breaches of directors' duties; wrongful and fraudulent trading; and claims restoring assets and monies divested by an insolvent estate prior to the inception of a formal insolvency process (i.e. claims to recover preferences, transactions at undervalue and transactions defrauding creditors). We frequently act in relation to director disqualification proceedings.
  • We act against insolvency practitioners in disputes concerning the conduct of insolvency processes, including where misfeasance and breach of duty is alleged against the officeholder.
  • We act to oppose the instigation of insolvency processes by creditors, for example by defending winding up / bankruptcy petitions; opposing the appointment of provisional liquidators; challenging administration applications; and, in some cases by instigating alternative insolvency procedures, with the effect of circumventing the course adopted by creditor.
  • We advise on the rescue and restructuring options that are aimed at averting insolvency procedures.
  • We advise on solvent tax and/or commercially driven reconstructions or re-organisations including members' voluntary liquidations (MVLs).
  • Our experience also extends to all formal and informal insolvency processes - administration, liquidation, provisional liquidation, bankruptcy, company voluntary arrangements (CVAs), individual voluntary arrangements (IVAs) and receiverships.

We act for and advise creditors on:

  • protecting against supply chain insolvency, including commercial arrangements aimed at mitigating the risks of debtor insolvency and the protection of goods and assets;
  • the instigation of insolvency procedures, where appropriate, as a means of pursuing recourse for the recovery of unpaid debts and/or assets – for example, appointments of administrators, provisional liquidators, winding up and bankruptcy petitions;
  • debt recovery litigation; and
  • the enforcement of guarantees and all forms of security and quasi-security (for example, liens or retention of title).

Where the debtor is already subject to an insolvency process, we advise creditors as to the submission of claims in the insolvency process and challenging decisions made by an insolvency practitioner in relation to such claims. We also advise creditors as to their recourse arising from the conduct of the insolvency process, which can include taking action to replace insolvency practitioners and/or challenge their conduct.

We act for liquidators, administrators, trustees in bankruptcy, receivers and supervisors, on all aspects of conducting formal insolvency processes.

  1. Dispute resolution
    An insolvency appointment can expose practitioners to litigation and disputes of any nature.  Whilst we have broad expertise in all aspects of commercial litigation, we specialise in claims that are insolvency-specific, e.g.
    • proceedings to invoke the officeholder's statutory powers of enquiry;
    • the recovery of preferences, transactions at an undervalue and transactions defrauding creditors;
    • claims relating to breaches of directors' duty and misfeasance;
    • wrongful and fraudulent trading; and
    • disputed creditor claims / proofs of debt.
    • Further, we are nationally recognised for our expertise in injunctive proceedings and asset tracing and are therefore uniquely placed to offer a range of strategies to resolve cases that feature fraud and wrongdoing.
  2. Transactional
    We advise insolvency practitioners and all stakeholders from the onset of insolvency through to the conclusion of a formal insolvency process on non-contentious matters.  This includes advising receivers, administrators and liquidators in relation to trading and any other issues arising on and following their appointment; and advising potential purchasers and officeholders on the purchase/sale of businesses and/or assets of insolvent companies.
  3. Advisory
    We understand the insolvency practitioner's role, obligations and objectives. We have expertise in acting on all aspects of a case and we do so as part of your team.  As well as advising on technical insolvency issues such as security, creditor claims, investigations and risk/ regulatory matters, we act as the gateway for insolvency practitioners to access the full range of legal services that are necessary for the conduct of a particular case, which may include employment, real estate, intellectual property, commercial and corporate, insurance and tax.

Recent Experience

  • We have acted for the administrators of Caterham Formula One Team on all aspects of the administration, which have included trading the team, the sale of assets, disputes and investigations.
  • We have acted for the shareholder of a property company (Angel House Developments Limited) in a claim against the former administrators of the company, and the appointing bank, seeking damages of 45m.
  • We have acted for the major shareholder of the Marussia Formula One Team in relation to its insolvency and administration.
  • We have acted for Group Seven, which was defrauded in the amount of €100m by a UK company, in respect of which we obtained an administration order.  We subsequently acted for the insolvency practitioners appointed in a long series of claims against connected parties who had received company funds.
  • We have acted for the officers of a large national recruitment company (Options Employment Group Limited) in defence of claims, totalling c£45m, for wrongful trading, fraudulent trading, misfeasance, transactions at an undervalue and transactions defrauding creditors.
  • We have acted for respondents to an unfair prejudice petition in a substantial shareholder dispute, relating to Beppler & Jacobson Limited, where provisional liquidators were appointed.
  • We have acted for the administrators of a company (Hampton Capital Limited), in pursuing a transaction at an undervalue claim. 
  • We have acted for the shareholders of company, incorporated in the Isle of Man, which owned a substantial London property.  We opposed a winding up petition and an application for the appointment of provisional liquidators.
  • We have acted against administrators of a company (Re Business Environment Fleet Street Ltd (In Administration)) in relation to a dispute regarding the provision of services to the company in administration and in relation to an application seeking declaratory relief in relation to the ownership of certain assets.
  • We have acted for directors of a US company against UK administrators who had wrongly obtained freezing orders against directors, and successfully obtaining the discharge of those orders.

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