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  • A little magic for an old lady



A private but quasi-professional lender, now of some age, lent money to an ostensibly successful property developer whom she knew personally. He became balance sheet insolvent as did all his companies which were liquidated.

Our lady was adamant that she had lent the money to the gentleman himself. Unfortunately, the paperwork indicated otherwise, it showed a loan to a foreign company (“Company A”). When investigated, Company A had registered charges exceeding its asset value by £10m and its assets were then being sold off by its bankers who were secured over the only assets of the company.

The erstwhile property developer claimed financial difficulties of a very extensive nature, which turned out to be all too true.

Our original lender had obtained judgments but in the wrong country and in the names of third party agents who had previously been assisting her, so the judgments were not in her name.

We proceeded as follows:

  1. We obtained the cooperation of the third party agents (now under investigation for inter alia embezzlement).
  2. We exported the judgments to the country where the assets and the foreign company were.
  3. We valued the assets and, at one stage, made an offer for same.
  4. We examined carefully the books of the companies as far as we were able to access same.
  5. We took a careful look at the Register of Charges.

Now we had some leverage over the erstwhile property developer. Even if we accepted that the original lender lent money to Company A and not the person, the company had been run in such a fashion as to make it impossible for her to recover any monies as the owner had preferred himself and his bankers over our lady.

Armed with leverage in the shape of rights of action against the erstwhile property developer and his wife, he was persuaded to part with his last asset with which we deal with below.

The position of Company A was one of hopeless insolvency, its assets were encumbered for sums far exceeding the value of its assets.


There were three mortgages: Charge 1 was to the bank, Charge 2 was the remaining asset of the erstwhile property developer. He owned Company B which had actually put cash in and then secured itself over the assets of Company A. Charge 3 was for a very large amount of money, to the bank relative to some other transactions which the erstwhile property developer had been involved in.

We managed to obtain a mortgage statement for Charge 1 which was for quite a small amount. Indeed, we could see that on the sale of the remaining assets payment would have to be made against Charge 2 owned by Company B.

We then entered into an agreement pursuant to which we did not acquire Company B (acquiring companies from insolvent property developers is risky), what we did instead was to acquire the loan capital in the company which did belong to the erstwhile property developer and we acquired, simultaneously, the charge over the assets which it had.

We then approached the bank and pointed out that they were in the process of selling the assets but they were only entitled to what was then due on Charge 1. In other words we would get some money on sale.

The bank resisted this notion quite forcibly, we threatened to hold the lawyers responsible for the sale personally if they parted with the monies, they ignored us and to add insult to injury, when we took issue the bank said that they had tacked on some other mythical financial transaction to Charge 1.

We took expert advice in the country in question and pointed out that the law did not allow them to do this and that Charge 2, which we notified them had been assigned to us was valid in its full sum.

At this stage the bank refused point-blank to negotiate with us in any way. We then issued proceedings. After a brief wrangle the bank capitulated.

It was not a perfect result for our original lender but we did manage to return to her a significant sum for which she was grateful.

The whole transaction was financed by Restitution (Jersey) Limited in who’s name all proceedings were brought. Our original lender made a risk free cash recovery in respect of a written off debt owed by a company and a person all of whom were hopelessly insolvent.