Insolvency and the proceeds of crime – protecting your claim

It is a general principle that the chronology of events gives rise to competing claims against assets when court orders have been made. However, understanding the impact of such events can enable creditors to take a proactive approach, say James Earp and Penny Cassell of Grant Thornton’s Fraud Division.

James Earp, partner and Head of the Fraud Insolvency Division (FIND) at Grant Thornton, tel +44 (0) 870 991 2464, email james.earp@gtuk.com; Penny Cassell, FIND manager at Grant Thornton, tel +44 (0) 870 991 2459, email penny.cassell@gtuk.com

The issue

The assets available to meet the claims of creditors may be subject to competing claims due to court orders in respect of those assets. Validly registered security will always ensure that secured creditors will have priority over unsecured claims and any subsequent decisions by the courts. However, when the assets are not subject to a registered charge, the availability of those assets to meet creditors’ claims may be affected.