When asked about what attracted them to a career in insolvency, all team members at Antony Batty & Company replied that it was the variety of work and the potential to make a difference that mattered the most.
In this case study, Steve Marshall (the head of our Brentwood Office) details the expert advice given to a client with significant debt whose business interests were centred on the property sector, both domestically and internationally, in a complex insolvency situation.
Background to this case
The case was introduced by a contact who is a trusted local business consultant.
The client was active in the property development sector using several complex corporate structures operated by an offshore private equity fund controlled by the client and part owned by an Icelandic investment company.
The business encountered significant financial difficulties when the investment company was acquired by a private bank who decided to withdraw support from any ongoing investments that did not match their existing portfolio. This precipitated the failure of a number of ongoing property development projects and the client required immediate expert insolvency advice in respect of a personal guarantee and investment loan liabilities exceeding £17 million.
After a detailed assessment of the options available and extensive engagement with major stakeholders, the client decided to move forward and propose an Individual Voluntary Arrangement (IVA).
Steve Marshall takes up the story
“An understanding of the Corporate structure and the repercussions of non-payment by the Corporate bodies was essential to the advice given which was time pressured. Based on our advice and initial feedback from key creditors, the client decided on the preferred route of an Individual Voluntary Arrangement. After a great deal of work, the approval for the IVA was within reach. Unfortunately, at the last minute, one of the creditors unexpectedly voted against the IVA, which meant the IVA was then not achievable.
As a result, the only available option was to petition for bankruptcy, and my advice then focused on helping the client with his bankruptcy application and assisting with the Official Receiver’s enquiries regarding his extensive business interests in multiple jurisdictions over the years.”
The introducer commented:
“Working with Steve, I found him patient, thorough and insightful but straightforward when he needed to be in what were challenging circumstances.
This was a complex matter and I cannot stress the importance of having the calibre of representation that ABC brings with Steve on the front line. Experience is everything and ABC deliver it when it most matters; a top-notch firm.”
IVAs and Bankruptcy
An individual voluntary arrangement (IVA) is an alternative to bankruptcy. A Licensed Insolvency Practitioner works to give IVA advice and help to the individual. It is a legal process that can give an individual struggling with their debts protection from creditors, and time to reach an agreement on payment, and the quantum of such payment. At the same time, it provides creditors with a better return than Bankruptcy. The procedure is extremely flexible and the form in which the voluntary arrangement takes will depend on the circumstances faced, and in turn the terms of the proposal agreed by the creditors. Each IVA is different, but the basic steps are the same – take a look at a simplified version of the IVA process.
Bankruptcy is the administration of the affairs of an insolvent individual by a Trustee in the interests of his/her creditors. When a person becomes bankrupt, the control of all of his or her assets, with certain exceptions, passes to the Trustee. Their job is to realise these assets for the benefit of creditors.
Normally, once the order is made, the Trustee (who is an officer of the Court) is the Official Receiver. The bankrupt loses any rights to his/her property apart certain exempt assets.
It is essential, therefore, that the right bankruptcy advice is given and that all other options, including an IVA, have been investigated.
