Joint Liquidators Settle Claim Against Asons Solicitors’ Successor for Undervalued Pre-Liquidation Purchase

On 23 March 2017, claimant industrial disease specialist, Asons Solicitors (now defunct), was sold to Coops Law Limited (shut down by the SRA) for £229,534.57.

On 24 March 2017, Asons was placed into Creditors Voluntary Liquidation (CVL) and Gareth Howarth, of Begbies Traynor LLP, and Julian Pitts, of Path Business Recovery, were appointed as ‘Joint Liquidators’.

In edition 277 of BC Disease News (here), we reported that the liquidators had filed a Notice of Progress Report in Voluntary Winding Up (the ‘Annual Progress Report’) with Companies House, which confirmed creditor concerns that the pre-liquidation transaction had not taken place ‘at arm’s length and for full value’.

As a result, it was revealed that the liquidators were suing Coops for having bought Asons (business and assets) for an ‘undervalued’ fee. Concurrently, they were suing Coops for contractual breach of a share purchase agreement term, which specified that it would pay Asons’ run-of insurance cover premium, totalling £99,400.

At that time, the liquidators were quoted as having been ‘currently in negotiations ... with the aim [of reaching] a settlement …’

In a material development, on 27 May 2020, the liquidators’ latest Annual Progress Report was filed with Companies House.

This disclosed that the liquidators have now settled their claims against Asons’ successor, in return for 10% of all recovered costs up to the value of £1.5 million and 20% of all costs recovered above £1.5 million, after deducting the costs of collection. [1]

When the Report was published, £1,244 had been recovered from Coops under the settlement arrangement.

In respect of the full extent of debt owed to unsecured creditors, the Report explains that proofs of debt are still being received ‘and therefore the total value … [is] … yet to be determined’. Meanwhile, the prospect of dividends being paid out remains ‘uncertain’.

 

[1] Neil Rose, Asons liquidators settle action against successor firm’ (2 June 2020 Legal Futures) <https://www.legalfutures.co.uk/latest-news/asons-liquidators-settle-action-against-successor-firm> accessed 2 June 2020.