Unmasking Covid-19 Business Interruption Insurance Claims in Insolvent Estates: The Untapped Asset

Manolete Partners Plc, Stewarts Law and R3 would like to welcome you to join an online webinar on 11 February 2025 between 1200 and 1300.

In this talk, James Breese partner at Stewarts Law LLP and Caleb Bompas, Associate Director at Manolete Partners Plc will talk through:

1. The latest developments in Covid-19 business interruption insurance litigation.
2. The claims that may still be available but unresolved and the sectors they are typically found in.
3. Important practical considerations for Insolvency Practitioners looking to unlock value in business interruption claims.
4. Key lessons from a real-life case study undertaken by Manolete and Stewarts that resulted in a major recovery for all stakeholders.

The webinar is free for R3 members and just £35 for non-members. To book your place, please follow the link below.

James Breese has acted on most of the leading test case litigation in this complex area and is representing the lead policy holders in Court of Appeal hearings in January 2025. James is still being instructed in relation to Covid-19 insurance litigation, including by administrators, in relation to significant unrealised assets that vest in insolvent estates - he will provide the latest update in this evolving area.

Caleb Bompas has over a decade of experience in complex insolvency litigation and commercial disputes having previously been at a leading City law firm. At Manolete, he now specialises in identifying, acquiring and managing claims arising from insolvencies, working in partnership alongside IPs and their chosen lawyers to unlock potentially high value complex litigation assets for Creditor Estates.

To illustrate the issues on Business Interruption Claims an actual case study is published below.

Caleb Bompas
ASSOCIATE DIRECTOR (LONDON)

Business Interruption Case Study

Background:
A Company in the hospitality sector with a substantial portfolio of outlets entered administration as a result of the negative impact on its liquidity caused by Covid. After a pre-pack saved a number of the sites and many jobs, investigations by the administrators identified the Company had a potential claim against insurers for business interruption in relation to the Covid pandemic.

Claims:
Prior to the administration, the Company had notified its insurers of claims for business interruption losses caused as a result of Covid. The insurers had declined to provide cover for the claims and a dispute arose which the Company was not able to pursue given its impecunious financial position. Once the administrators (and subsequent liquidators) were in office, they reviewed the various options of how to take the claim forward.

As they reported to the creditors, “it was deemed most cost effective to assign the Claim to a specialist third party funder, who would take on the risk of the Claim by discharging any fees/costs (including legals) associated with the same." Accordingly, Manolete Partners Plc took an assignment of the claim.

Challenges:

• The insurers were extremely well resourced and were willing to robustly defend the case, even through the Courts if necessary. As shown by some of the test case litigation, these claims can run for several years and have the prospect of being appealed all the way to the Supreme Court.
• This area of law has been complex, high risk and constantly evolving over the past four years. It was necessary to keep abreast of the latest developments in related cases and litigation and to constantly revise the litigation tactics and strategy accordingly. While the Courts have provided increasing levels of clarification as to the interpretation of different policy wording, there remains a considerable amount of uncertainty in the area which presents material risk for anyone pursuing such claims.
• While there is the potential for significant returns when litigating against insurers (who should be able to meet these potentially large claims), they require significant financial investment and technical legal know-how, which Manolete can provide from its experience acting alongside UK office holders.

Outcome:
With the assistance of one of the pre-eminent law firms specialising in business interruption insurance and with the benefit of the FCA test case and subsequent litigation on this ever-evolving area of law, we were able to put sufficient pressure on the insurer that they agreed to mediate.

At the mediation, we settled the claims for a seven figure sum which ultimately resulted in a return to the estate of close to £1.2m within 16 months of Manolete taking the assignment. As always when assigning cases to Manolete, the IP and the Creditor Estate had the full assurance that any adverse outcome was fully and solely covered by Manolete.

Find out how you can attend this event by clicking here.