Introduction
Our client’s company was placed into liquidation. He believed that in this case, he would have minimal personal liability however, the liquidator began pursuing him for an overdrawn director’s loan account.
The liquidator overseeing the case had pursued every transaction made from the account in the two years preceding liquidation. At this point, our client was facing a significant challenge in the form of an Overdrawn Directors Loan Account claim amounting to £154,000.
Why The Client Came To Us
As well as the threat of legal action or even bankruptcy over the £154,000 claim, our client was in the process of selling his property. This had an equity value of approximately £700,000. The liquidator’s threat of a freezing order posed a significant risk to the property sale, potentially disrupting the entire chain and resulting in substantial financial losses.
The looming prospect of losing the property sale and facing bankruptcy had taken a toll on our client and his wife, causing significant mental and emotional distress. It was at this point that he recognised he needed to appoint insolvency experts.
What We Did
Attacking the Fraudulent Claim: Our initial focus was to challenge the validity of the liquidator’s claim, using financial expertise to scrutinize incomplete accounting records. Using thorough analysis, we were able to identify discrepancies and inaccuracies that undermined the claim’s credibility.
Providing Financial Evidence: We gathered and presented compelling financial evidence to support our client’s case. Our thorough investigation demonstrated that the actual amount owed on the Overdrawn Directors Loan Account was significantly lower than the liquidator’s claim, totalling around £72,000.
Demonstrating the Best Interest of All Parties: To resolve the case in the most favourable manner, we developed a strong argument showcasing the benefits of allowing the property sale to proceed. We got the liquidator to agree to a reduced settlement paid from the proceeds of the sale. This ensured our client avoided bankruptcy and could preserve a substantial portion of their equity.
Outcome
Through our diligent efforts and negotiation skills, we successfully achieved a settlement of £53,500. This significantly reduced amount not only protected our client from bankruptcy but also allowed the property sale to proceed smoothly. As a result, our client was able to access the funds from the sale and utilize them to purchase a new property, enabling them to move forward with their lives.
This case required the use of our experience and knowledge of liquidation, director’s loans and a huge amount of accountancy work to disprove the claim made against our client. This was extremely time sensitive due to the threat of bankruptcy and the potential of a freezing order. Luckily, our client appointed us at the right time and we were able to resolve this issue.