This was an application made by the liquidators of the peer-to-peer lending company Collateral to adjourn a so-called oral enquiry.
The enquiry was to be made to Mr Andrew Currie and Mr Peter Currie, former directors of the three inter-connected Collateral companies:
Collateral (UK) Limited
Collateral Sales Limited
Collateral Security Trustee Limited
Mr Alexander Riddiford, of counsel, appeared on behalf of the liquidators BDO. He began with the background to today’s hearing explaining that in early 2018 the company directors sought to appoint Refresh Recovery Limited as administrators of the Collateral companies. Mr Riddiford told the court that the FCA had successful challenged that appointment and that Mr Shane Crooks and Mr Mark Shaw of BDO were appointed as joint administrators instead. It is understood the company transitioned from administration to liquidation in May 2019.
We were told on 20th December 2019 the court granted an order under the Insolvency Act 1986. The order was made under Section 236 Paragraph 2 of the act which states:
The court may, on the application of the officeholder, summon to appear before it—
(a)any officer of the company,
(b)any person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or
(c)any person whom the court thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property of the company.Mr Riddiford explained the purpose of the order was to allow a private examination of the two directors, who could be compelled to attend the high court and answer questions. We were told the examination broadly concerned:
- Documents in relation to the IT platform,
- Information about the property loan book,
- Information about the chattel loan book,
- Information concerning transfers of money in bank accounts prior to administration, including to directors and a developer
Mr Riddiford said the examination was originally listed for 19th June 2020 however Covid difficulties meant the Liquidators requested an adjournment “which is how we’re here today”. He said it was “fair to say the liquidators had experienced substantial difficulties with the respondent’s engagement”.
Mr Riddiford told the court that the liquidators had experienced a “reasonably productive” meeting recently with Mr Andrew Currie on Jan 22nd 2021 and Mr Peter Currie on 26th Jan 2021. The meeting had “given rise to further 3rd party enquiries and follow up questions for the respondents”. It was a result of these further enquires that he requested an adjournment, to allow the respondents time to answer the outstanding matters.
Mr Peter Currie, appearing unrepresented, told the court that the questions outstanding had all already been answered. He explained he had “very little paper copies of anything as everything was online” and that “my answer is everything is on the system”, adding “when control was handed over everything was intact”. Mr Peter Currie explained how he had agreed to have a meeting with the Liquidators in August 2020, which they had insisted was in person. He then claimed they postponed to “sometime in September” before eventually settling on a virtual meeting. He told the court the difficult personal circumstances he now found himself in as a result of the collapse and said he was concerned at the “extra layers of costs…costing thousands of pounds of the investors’ money” as a result of the actions of the liquidators. He said the case had been transferred from Manchester to London, which he claimed would result in 50% higher fees.
Mr Peter Currie explained that one reason for the delay was a typo he said the Liquidators had made in his brothers e-mail address, preventing Andrew from receiving messages from the liquidators. Mr Peter Currie referred to an e-mail sent as late as Dec 2020 from them which asked “do please share with Andrew as we don’t have an e-mail for him”.
Mr Peter Currie explained that his team and “all suppliers” had “offered to stay on [at collateral] for £40k for 6 months” adding “I think a lot of the problems have been caused by them not retaining anyone”. He claimed the liquidators had originally failed to “understand the business” reportedly charging a defaulted developer a default rate of 2.5%/year rather than 2.5%/month before the mistake had been spotted. Mr Riddiford did not respond to these allegations explaining they were outside of the scope of today's application.
Mr Andrew Currie, also appearing unrepresented, told the court he “had very little to add” from Peter’s submissions explaining that when they had first met BDO in court, at a hearing where they were appointed administrators, they had “celebrated as if they had won the lottery”. He further submitted that “every meeting I’ve been asked to attend I have” and that there had “been no lack of correspondence, I can’t magic up information I don’t have access to”.
Insolvency and Companies Court Judge Sebastian Prentis said the “important thing is the information is passed to the office holders as soon as possible” adding that the “issues with costs are matters the creditors can deal with”. “It is going to be a long drawn-out process because of complexity of operations.”
Explaining that whilst he hoped a court ordered examination would not be necessary, given the anticipated response to the matters raised in the January 2021 meetings, Judge Prentis adjourned the matter to the first available date after March 22nd 2021 and also transferred it to be heard at the Central London County Court.
ROLLS BUILDING
REMOTE HEARINGS IN HEARING ROOM 9
Before INSOLVENCY AND COMPANIES COURT JUDGE PRENTIS
February 12th 2021
At 2:00 PM by Microsoft Teams
CR-2018-001528 Collateral (UK) Limited
CR-2018-001526 Collateral Sales Limited
CR-2018-001527 Collateral Security Trustee Limited