Professional Services
FRP Advisory
Full Credential Description
A group of two FCA-regulated insurance brokers faced significant financial difficulties when it was discovered that their trust accounts, which contained client funds, were in deficit. The board of the group recognized that they lacked sufficient funds to restore these accounts, prompting them to appoint two partners from we as joint administrators for the group and its subsidiaries.
In response to this crisis, we initiated a comprehensive investigation to uncover the reasons behind the business failure and the deficit in the trust funds. The investigation revealed that the trust funds had been improperly co-mingled with the group’s bank accounts, complicating the financial situation further. This led to multiple court applications to determine how to address clients' claims, the process for distributing the funds, and whether the associated legal costs should be covered by the insolvent estate or the clients' funds. Ultimately, the court ruled that the costs could be drawn from the trust funds, necessitating an additional court application for a costs hearing.
As a result of these efforts, the client funds were successfully distributed. However, the group entered liquidation, and a substantial negligence claim was filed against a former adviser to the group, highlighting the ongoing repercussions of the financial mismanagement.