New Manolete financing model proving popular with IPs and Lawyers

In our last newsletter, we highlighted the much increased up-front payments we make to Estates on insolvency litigation claims which have been possible since our IPO in December. This has proved very popular among IPs and their chosen lawyers. With investment funds of £30m immediately available directly from our balance sheet, we are now able to pay much larger initial cash amounts when funding IPs or taking assignments of cases. This means Manolete puts real skin in the game from the outset and relieves the great financial pressure on IPs and lawyers that arises from their unpaid work undertaken before they approached us. The Estates continue to retain a 50% – 90% interest in the net proceeds of the case.

In recent months, we have received record levels of enquiries and subsequently we have signed a record number of new case investments.

We have continued to expand our regional network with two very exciting additions to our growing team. Rachel Grant now heads our practice in Scotland – she is one of only a very few insolvency lawyers to have been inducted into the Legal 500 Hall of Fame for Insolvency in Scotland.

More recently, Andrew Cawkwell has joined us as our lead in the North East. Andrew was ‘Turnaround Practitioner of the Year’ at 2016 TRI awards. All our regional Associate Directors are ready to support and help IPs and their lawyers with potential claims, so please do not hesitate to get in touch with them. They ensure the message is clear that Manolete is very much a country-wide company.

Steven Cooklin, ACA ACSI CF
Chief Executive, Manolete Partners PLC

In this issue:

• Starting a Manolete Claim Could Hardly be Easier by Dominic Vincent
• Manolete’s new legal appointees – Andrew Cawkwell and Rachel Grant
• Delivering Value for Insolvent Estates – Four Case Examples
• Strategic Partnership Events
• Judgment by Stephen Baister

Starting a Manolete claim could hardly be easier by Dominic Vincent

Dominic Vincent, our Regional Associate Director from the North West sets out the ease of submitting a claim to Manolete Partners.

“I spend a lot of time speaking with IPs and discussing cases they think Manolete may be interested in purchasing or funding.

They welcome the fact they don’t need to send masses of information for our investment committee to make a proper case assessment. And we will still give you an answer within a week. All we need essentially is a short summary of the claim and the key evidence supporting it. There will also be some correspondence relevant to the case which will help us decide one way or the other.

We are a friendly bunch so a quick call directly to the relevant Associate Director is an equally good way of getting the ball rolling.

Some cases may have some sensitive aspects you would prefer to discuss in person. Manolete has built a regional network of Associate Directors whose day-to-day work is to engage directly with IPs and their lawyers. So, we give these kinds of requests the priority they deserve. You may request an NDA to be signed which we are always happy to do.

When we do invest in cases, the IPs new to the business are very pleasantly surprised at the ease of getting the process going. We use a simple standard purchase or funding agreement. There is no prolonged drafting and negotiation of a lengthy CFA agreement by the solicitor which is a welcome contrast.

One of Manolete’s in-house solicitors will always be happy to discuss the case as it progresses so the latest position is fully understood. Whether Manolete is funding the IP or has taken an assignment, the IP stays as closely involved in the case as he or she wishes. Our model works by simplicity and openness which appears to be well-received by IPs and their lawyers as a whole. That is part of the reason 60% of our cases are repeat business.”

Manolete’s new legal appointees

Since May 2018, Manolete has recruited six regional lawyers. We are delighted with our latest two, Andrew Cawkwell and Rachel Grant who will add very significantly to our presence in the North East of England and Scotland.

All of our Regional Associate Directors are very highly qualified insolvency litigation lawyers at or around Partner level. Click here to meet the team

Andrew Cawkell (NE)

Since qualifying as a solicitor in 2003, Andrew has been consistently ranked by Chambers & Partners as a leader in his field. He is regarded as having “holistic awareness of contentious and non-contentious insolvency law”. Andrew has been a partner at multi office firm Watson Burton LLP and leading regional practice Muckle LLP.

Andrew has developed a national reputation as a Turnaround Practitioner and has been involved in significant restructuring work associated with professional sports clubs such as Darlington FC, Hartlepool FC and a regional county cricket club.

Andrew became the first dual qualified practising solicitor and Certified Turnaround Professional accredited by the European Association of Certified Turnaround Professionals and won Turnaround Practitioner of the Year at the 2016 TRI Awards. Andrew is a national board director of Turnaround Management Association (UK) and is a member of R3.

Contact details:
07702 319421 or
andrew@manolete-partners.com

Rachel Grant (Scotland)

Rachel has over 25 years of experience in insolvency law and joined Manolete from Scottish law firm Brodies LLP. Rachel has a top tier ranking and has been inducted into the Legal 500 Hall of Fame.

Rachel is a member of the R3 General Technical Committee and Scottish Technical Committee (which she chaired for over ten years). She is a member and former chair of the Law Society Insolvency Accreditation Panel. She was a member of the Law Society of Scotland’s Corporate, Banking and Insolvency Committee for over 20 years and represented the Law Society on the Joint Insolvency Committee.

Contact details:
07493 615696 or
rachel@manolete-partners.com

Delivering value for insolvent estates

Four case examples

Innovative solutions for a trustee in bankruptcy

We recently funded a London based Trustee in Bankruptcy (“TiB”) where the bankrupt claimed her main London residential property had been transferred pre-bankruptcy to an orphan’s charity. Following some good investigation work, the TiB discovered the property had in fact been transferred to the bankrupt’s son for nil consideration.

Manolete funded the TiB to recover this substantial asset for the benefit of the creditors and a Court Order was successfully obtained. However, further challenges arose when the TiB tried to sell the property. There were a number of charges registered – they were very old and various financial institutions could not find important paperwork to evidence their charges. Without having clean title to the property, it was proving very difficult to sell it.

The solution: Manolete simply paid off all the charges at no cost to the Estate (total cost to Manolete around £70,000) and so provided the TiB with clean title.

The TiB was naturally keen to realise value for the creditors, so Manolete obtained a third-party valuation of the property and purchased it in just four weeks.

Manolete is now making some small improvements to the property and will put it up for sale once the Brexit clouds pass and the London property market improves.

This case serves to highlight the flexible and commercial approach we take to financing Office Holders.

Major tax avoidance case: Working with HMRC, the IP and the legal team to deliver a terrific result

Following our recent win at trial on the PV Solar Solutions case, Manolete took an assignment of a multi-million pound tax avoidance claim from a company in liquidation. Working with the IPs existing external solicitors (as we always do), the claim was advanced through normal pre action protocol. After just seven months, the parties and the key stakeholders (including HMRC) agreed to a mediation. The claim was settled for over £2 million with HMRC receiving £1.5m through the liquidation process. All IP and lawyer fees incurred both before and after the assignment to Manolete were recovered in full. This case was a great example of the fast and effective way our model works supporting large, meritorious claims.

Manolete finance brings real credibility and a swift result in long outstanding claims

Liquidators identified claims in relation to a scenario which will be all too familiar to IPs and insolvency lawyers; namely the sale of valuable company assets to connected parties at an undervalue in the months prior to liquidation. Unlike many directors, the parties had obtained professional valuations, but nevertheless proceeded to sell for much lower sums.

Over a period of 18 months, solicitors for the liquidators had advanced the claims in pre action correspondence and had served proceedings in draft. This resulted in a without prejudice meeting, but the other side failed to make any commercially sensible proposals.

As there were no monies in the estate to finance issue of proceedings, the liquidators assigned the claims to Manolete. The identical claims were advanced in letters before claim on behalf of Manolete by the same law firm which had acted for the liquidators. In response, the other side immediately agreed to mediate and the claims were settled against five out of six targets, only four months after the assignment to Manolete. The mediation with the sixth target is being fixed.

The assignment to Manolete resulted in the targets rapidly settling claims which they and those advising them had previously dismissed.

Bundle of small but difficult cases

We were approached by an insolvency firm based in the North East with a package of eight cases where they had experienced problems in making any recoveries for a number of years. Having quickly analysed the cases we were able to make offers on six out of the eight cases. In most instances we gave the IP the option of a one-off case sum for full ownership of the case or a smaller initial case sum and 50/50 profit split. After just seven months, we have managed to complete settlements on four of the six cases, returning thousands of pounds to the various Estates and enabling the IP Firm to recover significant fees. We are hopeful that we can make significant recoveries on the final two cases as well.

These cases show we are happy to take on small and challenging cases that have often dragged on for years. Getting Manolete behind these cases will often result in a fast resolution.

Strategic partnership events

New Manolete partnership with the Insolvency Practitioners Association

The Insolvency Practitioners Association (IPA) and Manolete are delighted to announce the start of a three-year strategic partnership to boost their leading roles in the industry.

Manolete will be sponsoring the IPA regional Roadshows in 2019, starting with Glasgow on 13 June. Further roadshows will then follow in Belfast, Manchester, Leeds, Cardiff, Birmingham and London from September to November.

The roadshows are designed to give the perfect opportunity to engage in topical discussion, debate, networking and gain 2.5 hours CPD.

The IPA’s Personal Insolvency Conference in Manchester on 28 November 2019 will also be sponsored by Manolete, as will the Outstanding Contribution to the Profession award, to be announced at the IPA’s Annual Charity Dinner in London on 26 September 2019.

We have thoroughly enjoyed speaking and giving a session at the recent IPA Annual Conference and look forward to what will be an excellent commercial partnership.

Michelle Thorp, IPA Chief Executive, (pictured below), commented, “Being the UK’s leading insolvency litigation financing company, who share our primary concern with ensuring insolvency work is practised to the highest level, Manolete are an ideal partner for us. I’m looking forward to three very positive and productive years.”

Michelle Thorp
IPA Chief Executive

R3 Eastern Conference 28 March

Steven Cooklin and Alison Kirby of Manolete attended the inaugural R3 Eastern Conference at Madingley Hall, Cambridge on 28 March. It was packed with interesting speakers, including Professor Trevor Williams from the University of Derby talking about the UK’s Economic outlook post Brexit. So congratulations to the R3 Committee for organising such an inspiring event, and we look forward to next year’s conference, when no doubt we will still be analysing the UK economy and the Brexit effect.

Bristol Insolvency Seminar – 1 May

Manolete supported South West chambers Guildhall at its annual insolvency day at the start of May in Bristol. Chaired by Chief Insolvency and Companies Court Judge Nicholas Briggs, the day included a series of talks and workshops from members of chambers on a variety of topical technical issues such as: s.423 following the recent Sequana decision, environmental and planning liabilities of Office Holders and shadow/de facto director duties. The event was another sell out, a good opportunity to see many of our close contacts in the region and meet new faces. Attending for Manolete were Mena Halton, Charlotte May and Neil Stewart. If you did not get an opportunity to speak with them please contact our South West Associate Director Charlotte May – charlotte@manolete-partners.com or 07572 157033.

Judgment by Stephen Baister

Years ago, when I was still at school but thought that I might want to go into politics, I read Anthony Sampson’s ground-breaking book on the British establishment, Anatomy of Britain. There was a chapter on the judiciary. Sampson asked one of the judges who had agreed to speak to him what the most important quality was in a judge. The reply was, “Judgment”.

Judgment, in that wide sense, is hard to define. The fact that it has two spellings, “judgment” and “judgement”, only highlights the elusiveness of the quality the word seeks to describe. You know it when you see it, even if you cannot put its character into words. The Oxford English Dictionary’s first (of several) definitions is:

“The ability to make considered decisions or to arrive at reasonable conclusions or opinions on the basis of the available information; the critical faculty; discernment, discrimination.”

The second is:

“The fact of possessing this ability to a high degree or in a sophisticated form; discretion, good sense, wisdom.”

It is easier to consider what constitutes a good oral or written judgment, by which I mean the decision the judge makes as to the disposal of the case he or she is hearing or has heard. A good written judgment will generally contain the following:

1. a description of the issue or issues which the judge has had to decide;
2. a summary of the relevant facts;
3. a summary and evaluation of the evidence;
4. consideration of the legal submissions made by the parties;
5. the judge’s decision and the reasoning supporting it;
6. the result.

Often it is only the last item that is of interest to the parties, but that is fair enough.

Dr. Stephen Baister
Non-Executive Director, Manolete Partners PLC