The evidential burden of proof for transactions defrauding creditors.
Senior Partner and Head of Insolvency & Litigation Frances Coulson was interviewed by Kate Beaumont for Lexis Nexis.
Restructuring & Insolvency analysis: Frances Coulson, senior partner and head of Litigation & Insolvency at Moon Beever, points out that there are many cases where insolvency office-holders are becoming trustees of funds, but there has been limited guidance until now of how the costs of administering the fund are to be assessed.
Re Total Debt Relief Ltd (in liquidation)  EWHC 2018 (Ch),  All ER (D) 110 (Aug)
What are the practical implications of this decision?
In this case, the court determined that the liquidator of Total Debt Relief Limited (TDR) held recovered client monies of TDR as trustee. There are many cases where insolvency office-holders are becoming trustees of funds, but there has been limited guidance until now of how the costs of administering the fund are to be assessed.
The court assessed the costs of the liquidator dealing with the insolvency of TDR, a regulated firm, and approved a distribution plan in respect of client monies. The liquidator’s costs and legal costs were approved as drawn, the court considering that value had been provided to the full sum claimed and could be paid as an interim distribution from client funds.
In doing so, the court recognised the often-significant cost of complex actions to recover misappropriated funds, and that it was appropriate to enter into conditional fee agreements with solicitors and counsel. This is of comfort to those insolvency professionals who take substantial risk to seek redress from wrongdoers and deprive them of the fruits of their misfeasance.