Exposing Undisclosed Assets and securing £350,000 across two linked Bankruptcies

Background
Our practice was instructed by solicitors acting for a petitioning creditor who had recently obtained a bankruptcy order against an individual. During initial discussions, the solicitors noted that the bankrupt had recently holidayed in the Maldives, an unusual expenditure for someone claiming financial distress. This prompted us to undertake a deeper review of the individual’s financial affairs.

Initial Findings
Our enquiries quickly revealed that:

  • The individual had been a director of a company recently placed into liquidation
  • Around the time of that liquidation, the individual held shares in another company
  • These shares had been transferred to his wife after the bankruptcy petition was presented
This raised immediate concerns about a potential disposition of assets designed to place value beyond the reach of creditors.

Investigation and Asset Tracing
We undertook a detailed investigation, including:

Open‑source intelligence reviews
  • Analysis of social media activity
  •  Enquiries into the debtor’s wider financial affairs
Through this work, we identified undisclosed assets, including a motorbike that had not been declared to the trustees. We subsequently realised this asset for the benefit of creditors.

Discovery of a Connected Bankruptcy
During the course of our enquiries, we identified that a connected individual had also been made bankrupt. Notably, this individual had engaged in a similar transfer of shares following the presentation of a bankruptcy petition.

Given the parallels, we were appointed as trustee over the second bankruptcy estate with a view to pursuing recovery of the disposed shares.

Legal Action and Mediation
Both matters involved extensive correspondence between solicitors acting for the respective individuals. Given the complexity and the value at stake, all parties agreed to enter mediation to seek a resolution.

Outcome
The mediation resulted in a combined settlement of £350,000 across the two bankruptcies.

This enabled us to:

  • Reimburse the petitioning creditors’ costs in both matters
  • Make distributions to creditors, who had anticipated no recovery