A firm involved in a £1.6 million lawsuit against Anthea Turner is preparing to launch a specialist insolvency practice in Scotland in a move its founder says will “dramatically” improve returns for creditors north of the border.
Manolete Partners, which was set up in 2009 by former HSBC investment banker Steven Cooklin, works with cases where firms have gone bust because of the actions of suppliers, directors or other third parties. This could include companies that fail after a customer refuses to pay, or directors have taken money out of a business and not paid it back.
Backed by British venture capitalist Jon Moulton, Manolete buys the right to pursue these claims from company liquidators, who tend not do so themselves because they can be held personally liable if the case fails. If Manolete wins, the majority of the money goes back to the liquidator for distribution among creditors.
Cooklin said it tends to be a quicker model for resolving claims, and generates higher returns for creditors. “They can look forward to much higher returns on their debt, and quite often that can be the difference between that local business staying afloat or going bust themselves,” Cooklin said.
Manolete is currently pursuing TV presenter Turner on behalf of creditors of Imagine Homes, the buy-to-let business set up by her ex-husband which collapsed with debts of some £50m and entered administration in 2008. The claim relates to the sale of the former couple’s marital home, with Turner receiving more than £3m and her former husband getting just £400,000. According to the claim, this kept money out of the hands of Imagine Homes creditors who were owed millions.
Most litigation funders tend to focus on high-value cases such as these, but most of Manolete’s cases are far smaller, some down to a value of £20,000.
The firm’s formal launch north of the border will be in Edinburgh on 12 September, but having received confirmation this year that its model conforms with Scottish law, it has already been handling its first case. This has been referred from Begbies Traynor in Aberdeen, and relates to a £52,000 “director’s loan” that was borrowed from the company and not paid back when the firm went bust.
Though most cases are settled quickly, Manolete recently defeated Hastings Borough Council in the Supreme Court, winning compensation on behalf of creditors of Stylus Sports, which was forced into liquidation after the council used emergency powers to close the pier where Stylus traded. Stylus went under in 2006, and the Supreme Court decision was the third victory for Manolete on the case.
“That shows how determined we are, and that we are well-funded to pursue these kinds of cases,” Cooklin added.