28 Cases Completed in first Seven Months of 2017

Manolete continues to report a fast rate of case completions for Insolvent estates – in the current year to date, on average, Manolete has fully completed cases at a rate of one a week. The 28 cases range from £20,000 – £2m claims against dodgy directors,  through to multi-million pound claims against major UK quoted companies.

Manolete achieved a 93% success rate which has resulted in over £3.1m of payments into insolvent estates and over £1m paid to IPs legal advisers.

In all cases Manolete self-insures the ATE cost at zero cost to the case. Manolete also never uses CFA fee structures in paying legal advisers – all law firms and counsel are simply paid at normal rates, as the work is undertaken. ATE premiums and CFA fees are deducted from recoveries before any value goes to creditors. This will often leave the creditors with little or zero return. Manolete’s model never uses ATE nor CFAs, so results for the Estate and the creditors are maximised.

In the small minority of cases that fail, Manolete pays all of the IPs own legal costs and any and all adverse costs under its standard indemnity. For example, during this current period, Manolete funded a Trustee in Bankruptcy through to trial on a TUV claim. While we won the case and damages were awarded to the TiB, unusually, a much larger cost figure was awarded against the TiB. We rapidly agreed and paid those costs to the other side (a significant six figure sum) and settled the final remaining own side costs for the TiB’s legal team (a very large UK solicitor firm and leading London counsel), also a significant six figure sum.

While our model continues to generate fast multi-million pound recoveries for insolvent estates and creditors – we are always there to pick up all the pieces when things don’t go quite as planned.

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Manolete Announces Large Number of Case Completions and High Level of Recoveries

The first five months of 2017 saw Manolete complete 18 insolvency litigation claims – a rate of almost one completed case per week. A 94% success rate was achieved – only one case involved a write off by Manolete.

Cases ranged from £20k to multi million pound claims, against Directors and corporate enterprises. Total recoveries were approximately £4m.

The large majority of recoveries were paid to Insolvent Estates, where HMRC appeared most often as the major creditor to benefit from the resultant dividend.

11 of the 18 cases (61%) featured Manolete taking an assignment of the case from the Insolvent Estate. In the other 7 cases, Manolete funded the IP and the legal team to pursue the claim.

On all 18 cases the adverse cost risk was covered in full by Manolete at no cost to the case nor to the Estate. No ATE insurance was employed on any case – thus maximising the recovery to the Creditor Estates. On the one case loss, the Estate retained the initial payment made by Manolete and the lawyers were paid in full for their work. Manolete simply wrote off the entire loss.

On all cases Manolete paid for the legal work as incurred – no CFAs were used. Again maximising  the return to the Estates.

The average time to complete the cases was 10 months from the date that the Manolete financing began. The fastest being one month, the longest being 15 months.

Manolete has never financed a case via a broker – so Manolete’s % was always 30% – 50% of the net recovery (Manolete only takes any share after all legal costs have been paid – thus aligning Manolete fully with the Creditor Estate). Brokers typically insist on a large commission % to be built into the Funder’s costs, materially increasing the cost of funding. By approaching Manolete direct the IPs and Lawyers who referred these cases therefore maximised the recovery to the Estate.

Particularly on larger cases, a high upfront initial consideration was paid by Manolete to defray a large element of IP and Lawyer WIP incurred prior to our involvement.

16 different external law firms were engaged across the 18 cases.

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Nine Successful Case Completions in Q1 2017

Manolete Partners reported nine separate insolvency litigation case completions in the first three months of 2017, including one per week in March 2017. All cases were won.

The cases ranged from a £20,000 Director’s Loan Account, a £250,000 claim against a High Street Bank and a £1.5m Misfeasance Claim – a typical spread of the type of work that Manolete undertakes with IPs and insolvency lawyers.

These cases featured us funding and acquiring claims from some of the very largest accountancy firms in the UK, as well as small one and two partner specialist recovery practices in the regions.

On all cases a material recovery was made into the various Creditor Estates.

On smaller cases the Manolete recovery was the only asset available to cover IP’s statutory regulation work.

On medium and larger cases, large six figure sums were recovered for the significant benefit of creditors. All IP WIP prior to Manolete’s involvement was recovered in full, as well as legacy legal costs that had been unpaid before we were approached.

On all cases the majority/large majority of the recoveries was paid into the Estate (with Manolete always receiving a minority share) – all legal fees incurred post our involvement having already been settled by Manolete as the work was incurred.

As is standard with our insolvency litigation model, ATE was not used on any of the nine cases. If ATE had been applied, in many instances the Estates’ recoveries, particularly on the smaller and mid-size cases, would have been minimal. Instead, with our strong track record of only ever having lost one of our 169 contracted cases, Manolete simply assumes the full adverse cost risk, at no cost whatsoever to the case nor to the Estate. The Manolete Model therefore significantly maximises returns to creditors.

We also never use CFA arrangements with our external lawyers. We are there to take the full risk on the case – not the lawyers nor the IP/Company. We always make at least an initial cash payment into the Estate and then we pay for the work done as incurred (this includes additional IP case work as well as solicitor, barrister, expert and court fees). Again, this maximises the final recovery to the Creditor Estate – as all these cases were won, if litigated using a CFA, a large success fee would have been payable. Instead Manolete completely de-risks the legal teams and simply pays for the work as it is done. This greatly increases cashflow to the solicitors and barristers, many of whom are working with Manolete on multiple cases at any one time. We have become a very significant client to the solicitors and barristers that we engage. Our house policy is that the IP always chooses the legal team. There is no (and there has never been) “Manolete Panel” of approved solicitors and barristers. If the solicitor or barrister brings us the case, naturally, they are guaranteed to be retained if we fund or purchase the claim. Around half of our cases come from the legal community and half direct from IPs.

The one case we have lost resulted in a large six figure payment to the defendant’s legal team. As ATE was not employed, we simply settled this matter directly from our balance sheet. The IP/Insolvent Company retained the initial payment she had received on the case and naturally the IP’s solicitors and counsel retained all the fees we had paid while the claim was being progressed. Manolete simply wrote off the entire own and adverse costs. Litigation is inherently high risk: the funder must be there for the bad times, not just the good.

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