Bounce back loans - Barclays pilot
Manolete’s work with Barclays Bank to recover money for the taxpayer from Bounce Back Loans (BBLs) has received media coverage in the Financial Times and City AM.
The pilot, also in conjunction with the British Business Bank, involves over 100 companies who have defaulted on BBLs lent by Barclays as part of the Government’s business support scheme during the Covid-19 pandemic. BBLs were zero interest loans of up to £50,000 and were made by several banks, Barclays being prominent amongst them. A substantial number of loans were potentially misappropriated by Owner Managers.
Steven Cooklin, Chief Executive of Manolete, said to Jane Croft of the Financial Times, “In some cases loans went out of business accounts into personal accounts. There seem to be a lot of directors who have tucked the money away and think - if someone comes knocking on the door - I’ll give it back.”
Manolete will take an assignment of the claims on these cases and divide recoveries with Barclays after costs.
Steven said to City A.M that cases were being dealt with efficiently, “Recovery rates have generally been very high and cases completed within an average of just five months and at minimal cost.”
The full media reports can be read here:
Q and A
Associate Director for the East
What is your legal background?
I qualified as a solicitor in 1998, working in commercial litigation mainly, and moved to Howes Percival LLP (“HP”) in Norwich in 2005 to concentrate on contentious insolvency work. At that time they were the appointed solicitors on a contract for non-standard insolvency work with HMRC. So I was straight into drafting applications for freezing injunctions and to appoint provisional liquidators without notice to the Company Directors. I became a junior partner in 2008 and a full equity partner in 2012. During my time at HP I worked primarily on the HMRC contract, moving to head up a team undertaking work in the First Tier Tax Tribunal in respect of MTIC fraud, while also undertaking work for insolvency practitioners and helping to deliver the mainstream HMRC contract.
How long have you been at Manolete?
I joined Manolete in March 2019 as part of their expansion into the regions. I am the Manolete Associate Director in the East of England and through historic connections I also cover some of the Midlands too. Part of the role is business development and the other part is reviewing the cases, recommending investment decisions and monitoring all cases whether we fund or purchase. So, as we entered lockdown in March 2020, I wondered how it would all work if we, as Associate Directors, could not undertake our BD roles fully. I needn’t have worried; I remained as busy as ever and that has not stopped for the nearly four years I have been in the role.
What have been your main impressions?
Before I joined I had undertaken some work for Manolete, so I knew they actually do what they say they do. I had wondered if the ‘Manolete Effect’ was really true. On one my earliest signed cases, the Director had simply ignored the IP. As soon as we advised of the assignment, he went to a solicitor and we had a settlement in the space of a few months which was far more than I had expected and certainly better progress than the IP alone had been able to make.
What are the other highlights?
To be able to work with a broader range of IPs and to learn from working with, rather than against, firms of solicitors. In addition, to know you can issue court proceedings and press on with good cases is a really positive feeling.
What do you do outside of work?
I enjoy growing fruit and vegetables and sometimes fermenting them in to alcoholic drinks! I love to cook, in fact I just love food in general.
MANOLETE REPORTED CASE
Defendant’s Strike Out Application Dismissed, Manolete Partners Plc v Sampson Coward LLP  EHHC 37 (Ch)
By Mena Halton, Managing Director
In a judgment handed down on 13 January 2023, Deputy Master Teverson refused the Defendant’s application for summary judgment on part of the claim.
Manolete as assignee of the claims of UK Property and Land Specialists Ltd (in liquidation) and Nero Developments Ltd (in liquidation) (“the Companies”) issued a claim against Sampson Coward LLP on 28 February 2022, which proceedings were served on 7 March 2022.
The Defendant, a firm of solicitors, had acted for the Companies on various transactions including the advance of loan monies by lenders and had also acted as escrow agents. The claim is that in failing to protect the assets of the Companies/misapplying property of the Companies, the Defendant committed breach(es) of trust and/or fiduciary duty and further/alternatively its undertakings as a solicitor and equitable compensation is sought in the sum of approximately £2m.
On 6 April 2022, the Defendant’s solicitors issued an application seeking summary judgment on certain parts of the claim on the basis that monies in the escrow accounts, which had been advanced to the Companies by lenders, remained the property of those lenders and therefore Manolete as assignee from the borrowers had no claim. It is Manolete’s position that the monies in the escrow accounts were beneficially owned by the Companies at all times - the lenders claim as creditors in the liquidation of the Companies and this is inconsistent with any suggestion that all the money handled (and misapplied) by the Defendant remained the property of the lenders.
The application first came before Deputy Master Teverson on 24 October 2022 when counsel for the Defendant submitted that Manolete should be ordered to serve amended Particulars of Claim so as to set out its case to beneficial entitlement of the monies in the escrow accounts operated by the Defendant. It was adjourned part heard until 9 November 2022 for submissions in reply.
The Master concluded that beneficial ownership of monies advanced by the lenders was not a suitable issue on which to grant summary judgment. The Defendant’s solicitors had not provided a draft order and had not defined what part of the Particulars of Claim they believed had no real prospect of success, leaving it unclear which parts of the Particulars of Claim would require amendment. The Master held that there was not a sufficiently clear formulation on which to attach a striking out or dismissal sanction.
With regard to the breach of undertaking claim, the Master came to the same conclusion. The Defendant relied on the Supreme Court decision in Harcus Sinclair LLP v Your Lawyers Ltd  UKSC 32 at paragraphs 137-148 that the court could not summarily enforce an undertaking from an LLP. The Master was referred by counsel for Manolete to the last sentence of paragraph 140 in which the court said it was open to them as a matter of developing the inherent jurisdiction of the court to treat a solicitor’s undertaking as extending to an undertaking given by an incorporated law firm. He submitted that, accordingly, the point remained open and was not a basis for summary judgment.
A third issue raised by the Defendant was in relation to three property transactions carried out by the Defendants on behalf of UK Property and Land Specialists Ltd when properties were sold to connected companies and then on to unconnected third parties at a higher price. It was submitted by counsel for the Defendant that Manolete should be required to plead the counterfactual, i.e. what the Defendant should have done. The Master held that this was not an issue suitable to be determined by way of summary judgment application made prior to filing of a defence.
The Master declined to grant summary judgment and ordered the Defendant to file and serve its Defence.
An application by a Defendant for summary judgment prior to service of defence is a bold move - in particular, as in this case, when the Defendant does so without raising the issues in any prior correspondence. When giving his judgment on consequential matters Deputy Master Teverson was critical of this lack of correspondence and of serious defects in the Defendant’s application.
There are various options open to a Defendant who requires further information in relation to Particulars of Claim or who considers the claims to be lacking clarity. Matters can be raised in correspondence, addressed in the Defence or a request made for further information under CPR Part 18. To proceed with an application for summary judgment as a first move is a high risk strategy which requires compelling reasons for a decision without the fuller investigation of facts through the trial process and an application which is properly formulated.
Welcome to our new colleague
We are delighted to welcome Jean Boldero who is an Associate Director for the North West region. Prior to joining Manolete this month, Jean spent 32 years in senior roles with Addleshaw Goddard where she specialised in insolvency and fraud related litigation, including breach of directors' duties and unlawful dividend claims. Jean has held positions on a number of professional committees in the region, including R3 and she is recognised as a rising star in the 2023 issue of Legal 500.
SOCIAL MEDIA VIDEO
A rapid assessment
Manolete has developed a series of social media videos, with our PR partners Instinctif. The videos highlight the strength of our lawyers network, the unique Manolete model and the benefits to creditors in insolvent estates if IPs choose Manolete litigation finance.
Gold sponsorship of IWIRC
Manolete Partners Plc is delighted to announce that, from 1 January 2023, it has become a gold level sponsor of the International Women's Insolvency & Restructuring Confederation (IWIRC).
The IWIRC is the first international professional association dedicated to enhancing the professional status of women in all disciplines of insolvency and restructuring. IWIRC pursues this goal through a simple but effective principle: to create an international networking organisation that promotes communication, common interest and community among insolvency practitioners. It has over 2,000 members globally who represent every discipline of restructuring: law, crisis management, financial advisory, banking, private equity, claims management and communications.
Manolete Associate Director, Tanya Barrett said: “IWIRC is the leading networking organisation for women in the restructuring and insolvency community and is committed to the connection, promotion and success of women working in the industry. I have been attending IWIRC events as a member and I am delighted Manolete has supported IWIRC as a sponsor in 2023. We look forward to contributing further to the diverse network and opportunities that IWIRC excels at.