The Defence of Insolvency Based Claims
Bankruptcy and insolvency are a vital area of the work of this firm.
We are very experienced at representing clients who are subject to claims by a trustee in bankruptcy or a liquidator.
Please do not hesitate to contact us for an initial telephone call, and if you wish we can set up a fixed fee meeting.
Insolvency Based Claims
We will provide below some examples of cases within this field of work which we have dealt with:
- We habitually defend claims by trustees in bankruptcy for possession and sale of the family home. We usually represent the spouse/partner of the bankrupted person, albeit we can also represent both the spouse and the bankrupt person after discharge and assuming that there is no conflict of interest. Such claims will typically involve claims by the spouse for an increased share of the property as a result of equitable accounting – such as paying for improvements or by continuing to pay the mortgage in full after the date of the bankruptcy order. There will be negotiations to purchase the interest in the property of the trustee in bankruptcy for an agreed (lowest possible) sum and/or (if at less cost) an application is made to annul (namely set aside) the bankruptcy order upon the full payment of the debts and expenses of the bankruptcy. The route adopted will be the least expensive one. We are also able to introduce specialist brokers, who are independent of our firm, and who are able to provide advice and assistance in relation to the raising of specialist insolvency finance- which typically consists of (temporary) bridging finance. Affordability may not be an issue if the exit route is the sale of the property as opposed to subsequently refinancing the loan at normal commercial rates. The sale of a property by a trustee in bankruptcy is usually a very bad financial option for a number of reasons, including a) relatively low forced sale price achieved by a trustee in bankruptcy b) the net proceeds of sale being subject to a tax or negative ad valorem duty, of circa 15%, and c) relatively high legal and professional costs of the trustees in bankruptcy and their solicitors- to be deducted from the net proceeds of sale.
- The defence of a claim by a liquidator for repayment of monies made from the business by a director. This may be coupled with claims for wrongful trading and/or repayment of monies when such payments are alleged to be a preference or an undervalue. Whether a payment is a legal preference depends upon a technical legal definition. For this type of claim, we normally engage the assistance of specialist insolvency Counsel to assist us, in particular, to formulate a detailed letter of response to the pre-action protocol letter of claim sent out by the Liquidators solicitors.
- Providing advice and representation to clients who are subject to a proposed bankruptcy restrictions order – which will enlarge the length of the bankruptcy in so far as the bankruptcy restrictions are concerned. These include prohibitions against being a director of or being involved in the management of a limited liability company or, borrowing in excess of £500 without disclosing the bankrupt status etc.
- Represented clients in relation to proposed income payments agreements/orders by a trustee in bankruptcy.
- Protecting the pension of our clients as against a trustee in bankruptcy. The general position is that normal occupational pensions schemes are exempt from the bankruptcy estate.
- Defending claims by a trustee for the seizure of bankruptcy property, including on the grounds of excessive value.
- Defending any proposed or actual insolvency based criminal prosecutions.
Please call 0208 446 6223 for an initial telephone call and to arrange a meeting. If your matter is urgent, we can try and see you on the same day. Alternatively, please email Michael Abraham, our specialist bankruptcy partner, directly with your enquiry.
Contact Simons Rodkin Solicitors LLP
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