Manolete Through the Lens

In my six years at Manolete, I have not had the same question or case query posed more than once; every case is unique or somehow special in its own way. However, there are many patterns to the work I encounter and the claims Manolete pursues.

 

The most common type of insolvent companies I see day-to-day are construction companies and take-away retailers. Below I look at how office holders can investigate potentially missing assets.

 

It is a difficult economy for construction companies: they are invariably reliant upon delivery by other suppliers or contractors and cashflow is notoriously tight. The hardest part is sometimes spotting the claims for construction companies; there might be unaccounted withdrawals which are obvious on the bank statements, but what else (if anything) might have gone missing? 

 

One positive is that there tend to be more books and records generally available, or counterparties and suppliers to help fill in the knowledge gaps. The problem is that assets being developed may only be recorded in the balance sheet at book value and not gross development value, making it hard to spot a reduction in capital assets. How can an office holder spot something that he or she never knew was there in the first place? 

 

If a construction company is finding cash tight and has trouble selling on practical completion, a director might be tempted to acquire a property or development themselves or transfer it to a family member. On one such case, the liquidator was unaware the director’s own property had been built by the company and transferred it to him at an undervalue. The company had failed to sell in a difficult market and the property was funded by expensive bridge lending. In the director’s view, he was helping the company save money because the loan was so expensive. Unfortunately, he had purchased the property at about £300k below market value. 

 

In reviewing various other claims against the director, we noticed the director’s property was fairly new and decided to obtain historic searches at the Land Registry to see how it had been acquired. This revealed the transaction at an undervalue, not otherwise evident from the books and records. This was a very straightforward claim that significantly boosted the overall claims and led to settlement. I would highly recommend office holders to check the historic records if the property has been owned for less than a few years. A PN1 search can be helpful where appropriate.

 

Takeaway retailers can sometimes be run on cash-only transactions which makes records difficult to discover, let alone review. Given the increase in contactless payments and reduced popularity of cash, some retailers have adapted by misusing the shop’s EPOS or ‘Electronic Point Of Sale’ (a form of electronic till). EPOS tills mean a business can seamlessly record sales to bookkeeping software which is in turn used to account for VAT. However, some retailers take the customer’s card payment but then immediately ‘cancel’ the transaction so that it is not recorded in the sales, therefore turnover is not properly declared and VAT is underpaid. 

 

HMRC have powers to enter a business and analyse the EPOS tills to investigate potential underdeclared sales. Any reports by HMRC are very helpful, as they are very forensic and help to build a picture of what might be unaccounted in the business. 

 

If an investigation by HMRC is not available, an alternative is to review the bank statements to determine if the income reflects the stated turnover. A further alternative is to look on the bank statements for any income from online providers such as Just Eat and Deliveroo. An office holder can seek information on the retailer’s account with the online provider to determine if the bank statements reflect the stated trading. 

 

On one claim against a chip shop director (who had used the ‘cancel’ button for every other transaction), we had concerns about recoverability as initial enquiries revealed no property ownership. The online map view of the business showed some flats above the rented property. Searches at the Land Registry revealed these flats were owned by the director. A planning search also revealed another property that was being developed. The director settled with us in full shortly after we informed him we were aware of his other properties. 

 

So again, Land Registry searches proved decisive when settling this case and so giving creditors better access to justice.

 

After a highly successful three-year tenure as Head of Business Development, we are delighted to announce, Andrew Cawkwell has been promoted to Chief Operating Officer here at Manolete Partners Plc.

 

This well-deserved promotion expands Andrew’s role across all elements of Manolete’s operations, empowering him to apply his outstanding management skills to help further optimise our day-to-day business.

 

Steven Cooklin, CEO, said: "Andrew has been with us since May 2019, and over the last three years, he has played a pivotal role in redeveloping and re-energising our Business Development Department. His efforts have significantly enhanced the support we provide to the incredible work of Insolvency Practitioners and their legal teams. The Board has been tremendously impressed with his contributions and we are very excited to see what he will achieve in his new role as COO."

FEATURE

 

Joshua Rozenberg, a legal commentator of considerable learning, wrote a short tribute in 2023 to the late Sir Robin Day, a pioneer of the political interview, to mark what would have been his 100th birthday.

 

I am old enough to remember his crisp, forensic style on Panorama; old enough too to have forgotten that he trained as a barrister, although he did not practise for long. I suspect, however, that some of what he learned rubbed off and contributed to his fearless and incisive interviewing technique.

 

It stands in contrast to that of many modern interviewers, in particular those on Radio 4’s Today Programme whose interviews are often a shambles. They ask long, rambling, multiple questions; they ask questions that presuppose the answer (“You must think/feel…” is just one way in which they try to put answers into people’s mouths); they interrupt and interject instead of letting their subject give a proper answer when they do ask a proper question. And they get their time estimates hopelessly wrong, often having to bring a session to an abrupt close to make way for some piece of trivia we could all do without. Often, interviews are more about the interviewer than the interviewee. 

 

Many modern broadcasters could learn from a short course on advocacy, at least from the cross-examination module, if there is one. The law can sometimes give lessons that can be applied in other areas of life to great effect.

The R3 Southern Forum 2025, will be held at the Marriott Bournemouth Highcliff on 20 March. Once again, the Forum will bring together insolvency, restructuring, and turnaround professionals from the Southern & Thames Valley, South West & Wales and London & South East regions.

 

This year, R3 promises an interesting and comprehensive roster of speakers and topics, relevant to all colleagues in the profession.

 

Neil Stewart, Manolete Associate Director and R3 Southern & Thames Valley Chair will be opening the Southern Forum. 

Manolete Associate Director (London) Caleb Bompas will be hosting the session 'Dragons’ Den: Game-changing tools for the Industry'.

 

Included with the Southern Forum ticket, the gala dinner will be hosted on Thursday 20 March. The evening will start with a welcome drinks reception followed by a three-course dinner.

 

The Forum offers great opportunities to network throughout the day and at the post-forum dinner. 

 

Marriott Bournemouth Highcliff,

105 St Michael's Rd,

W Cliff Rd,

Bournemouth

BH2 5DU