IPA exclusive industry update from Insolvency Insider

IPA Insolvency Practitioner newsletter, July 2024

A specially curated selection of the top stories for IPA members from Insolvency Insider Editor, Dina Kovacevic. More information on all the stories and the link to subscribe to the newsletter is here.

Recent insolvencies

• McDermott Smith Law, a Liverpool-based law firm specialising in volume consumer claims, entered administration on 1 July, reportedly following an application by litigation funder Fenchurch Legal. The firm’s most recent accounts show remarkable growth over the past year, not only in WIP and number of employees (from 24 to 69), but also in the amount owed by the company (a chunk of which is understood to be owed to litigation funders). Andrew Hosking and Sean Bucknall of Quantuma and Damian Webb of RSM were appointed joint administrators. Katch Fund Solutions and Fenchurch Legal have registered charges against the firm.

• Right Time Recruitment Limited, an IT-based recruitment company whose director won ‘The Apprentice’ in 2017, entered liquidation on 29 May. James White established the agency in September 2016. In 2017, he appeared on the popular television show and became a joint winner, with Lord Alan Sugar investing £250,000 into the company. Although Right Time Recruitment reported a turnover of £1.9 million in June 2022, the business took a downturn by the end of 2022. The company ceased trading and sending invoices in February 2023, and was eventually placed into liquidation in May of this year. Jamie Playford of Leading Business Services is the liquidator. Lloyds Bank Commercial Finance has a registered charge against the company.

• Dead Happy, an insurance intermediary founded in 2013 with the aim of providing tailored and flexible life insurance, entered administration on 24 June. The company grew to a revenue of £2.5m by 2023, with more than 25,000 active customer policies. However, a controversial ad campaign caused the company to be reprimanded by the FCA and the Advertising Standards Authority (ASA), and reportedly led to its insurance partners cutting ties with the firm. Adam Stephens and Kevin Ley of Evelyn Partners were appointed as joint administrators, and are working with the underwriting insurers to ensure that all customer policies transfer back to the insurers with minimal interruption to customers. As part of this process, the business will continue to trade on a limited basis, with certain employees kept on to assist the administrators with their work.

Insights

• Nick Charlwood, Joel Ferguson, Katrina Buckley and Christopher Poel of A&O Sherman consider the implications from the recent High Court judgment finding two former directors of BHS liable for various heads of wrongdoing, including wrongful trading and “misfeasant trading”, reminding directors of the “duty shift” which applies when as a company gets closer to the “zone of insolvency”.
• The team at Osborne Clarke share key takeaways from two recent cases which concerned creditor extensions to an administration procedure but may have a broader effect, since the provisions at issue impact other administration decision-making, including the approval of proposals and remuneration.

• Andrew Pepper of ReSolve Advisory argues that to address the UK’s long-standing housing crisis, the government must implement bold and sweeping reforms that reinvigorate the housebuilding sector by reducing planning delays and supporting small and medium-sized enterprises (SMEs) to increase competition and local market expertise.

Please note that guest content does not necessarily represent the views of the IPA.