I was chatting to an acquaintance one day who mentioned his companies were not trading well and that he had appointed insolvency practitioners.
This process was not proceeding as he had hoped. He mentioned that a related company not in administration would be paying out the bank, which would leave him and his business partner with nothing.
After a 15 minute discussion I presented a strategy to him whereby we could utilise the payout of the bank by the company not in administration and obtain from the bank a full assignment of all of the bank’s securities.
In effect the company not in administration then took the position of the bank as the secured creditor over the companies in administration. This enabled the company not in administration to appoint a receiver to the companies under administration. The receivers were able to recover assets in excess of $4 million which flowed back to my clients.
Had the administration and the liquidation proceeded without this approach my clients would not have recovered any funds at all.
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