The difficulties of recovering debts from networks of UK & offshore companies or their directors

It has recently become much easier for the public to find out about company and director finances because Companies House have made access to their companies database free. This is the government database of the public records of businesses in the UK. Previously, obtaining accounts and other documents from Companies House was £1 a time, which quickly adds up when looking into complex networks of UK and off-shore companies in various states of activity or insolvency, like the Mountgrange companies. We had previously had to buy various documents to find out about some of the other attempts to recover some of the Mountgrange millions.

But, now that the information is free, it is much easier to look into some of the Mountgrange businesses, their connections to off-shore companies and the attempts to recover some of the debts. For example, the administrator of Mountgrange Land Limited found it hard to recover a £1m+ loan that Mountgrange Land Limited made to its only director:

Mountgrange Land Limited Administrators report 4th March 2015

Director’s Loan

At the date of the Administrators’ appointment the Director’s loan account balance was £1.15m. The Administrators were engaged in protracted dialogue with the Director since commencement of the Administration regarding repayment which concluded that recovery of the Director’s loan from any formal enforcement action would be both limited and uncertain.

In the absence of funds to progress a formal enforcement action and in view of the potential recovery, the Administrators agreed a settlement of £100,000 with the Director in November 2014 in full and final settlement of the Director’s loan accounts in the Company and Stud. This has been apportioned in proportion to the Director’s loan balance in each . The sum of £81,249 was allocated to the Company.”

What this says is that after more than 5 years, a large administrator could not recover £1.15m from one of Mountrange’s directors and had to accept £100,000 instead.

This weighed heavily on our decision not to go to a full judicial review over the Craighouse decision. We were concerned that it would be very hard to protect the individual members of the group challenging the case. Whilst the law does little to protect communities fighting such huge companies through judicial review, it seems that the system also does little to challenge or reclaim the monies owed by large companies and the individuals associated with them. This unfairness in the system should be improved, but unfortunately the Scottish Government is making it harder for communities to challenge the lawfulness of decisions like Craighouse on environmental grounds.

 

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About friendsofcraighouse

A local group wanting to preserve the beautiful Craighouse Campus site in Edinburgh.
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