The liquidators in a claim against directors of a financial institution

We successfully reached a settlement for the joint liquidators in a high value claim against a financial institution’s directors and connected entities.

The financial institution is FCA regulated and provides letters of credit and letters of guarantee to companies around the world. These are documents that provide security and assurance to buyers and sellers, helping to reduce the risk and uncertainty associated with international trade.

The financial institution was facing various legal claims for payment under these letters of credit and letters of guarantee. The company lost a claim in the High Court, resulting in a liability of $3m.

We helped the joint liquidators to investigate potential claims against the directors and connected entities. These claims were for breach of duty (failing to make sure there was enough money to pay out under the letters of credit and letters of guarantee) and for payments made to connected entities only five days after a draft judgement had been received. They received money ahead of other people who were also owed money by the company, including the claimant in the court case.

We undertook a comprehensive review of documentation to analyse the facts, applying the relevant law. We also researched the defendants, who were in a different jurisdiction.

We sent initial letters to four respondents before taking legal action, and we were successful in reaching a settlement on a confidential basis.