Case Study: High Value Recovery Through Strategic Litigation
£3.425 million settlement achieved following claim assignment, High Court proceedings and asset preservation action.
Background: Following the insolvency of a UK company, the appointed liquidator identified potential claims arising from transactions and dealings that took place prior to liquidation. The claims involved former connected individuals and entities and related to assets held through associated businesses.
As is often the case in insolvencies, the estate lacked the financial resources required to investigate and pursue complex, multi-party litigation. To maximise returns for creditors, the liquidator assigned the claims to Manolete, enabling further analysis and the pursuit of recovery actions without exposing the insolvent estate to the costs and risks of litigation.
The Challenge: The claims involved multiple defendants, interconnected transactions and assets held through connected entities. Recoveries in cases of this nature can be particularly challenging where there are concerns that assets may be transferred, dissipated or otherwise placed beyond reach before judgment can be obtained.
Given the complexity of the claims and the need for urgent protective action, specialist finance and litigation expertise were required to investigate the matters fully, preserve potential recovery sources and pursue the claims through the High Court. Without that support, any potential recovery may have remained unrealised, leaving creditors with little prospect of a meaningful return.
The Manolete Effect: Following assignment of the claims, Manolete undertook the investigation, assumed the litigation risk and commenced High Court proceedings.
Recognising the importance of preserving potential recovery sources, Manolete successfully obtained proprietary and freezing injunctions against the defendants. The injunctions remained in force during the proceedings, protecting the position while the claim progressed through the courts.
By financing the litigation, securing protective court orders and pursuing recovery through the High Court, Manolete transformed a claim that could otherwise have remained dormant into a significant asset recovery opportunity for the insolvent estate.
Outcome: A settlement payment of £3.425 million.
Key Takeaway: This case demonstrates the value Manolete brings to insolvency estates. By purchasing the claim, financing the litigation, obtaining asset preservation measures and pursuing recovery through the courts, Manolete converted a complex and potentially high-risk insolvency claim into a multi-million-pound recovery. The insolvency practitioner was able to realise value from the claim without committing estate funds to lengthy and expensive litigation, ultimately improving the prospects of returns to creditors.
Author: Ronan Butler, General Counsel
Mob: 07971 628875