Are insolvency practitioners liable for the banks offers in the FCA irhp misselling review ?
The irhp misselling debacle is growing increasingly interesting with new Causes of Action (COA) being allowed to be argued in respect of the implementation and decisions flowing from the banks own reviews of their malfeasance when selling Derivatives.
In the world of businesses making decisions to accept or decline offers being made the responsibility sits firmly with those in charge but for businesses in insolvency it is the insolvency practitioner (IP) that must make the decision to accept, challenge or decline the banks offer for Settlement.
One IP recently stated;
“how can we be expected to not only understand the complex nature of derivatives and the effects on businesses but now also be asked to make the decision that the banks offer to Settle is ‘fair and reasonable’ when we have no insight and all the liability”
This is of course true. The IP wasn’t there at the point of ‘missale’ nor do they know what the banks own review team has based their irhp review decision on, yet they are asked to sign a Settlement Agreement to exchange cash payments with Full & Final terms, including fraud with Lloyds bank.
The IP went on to comment;
“it is one thing looking at the financial position of a company and another to have to factor in monies taken by the bank that appoint us. None of this was detailed in our scope when the appointment was offered”
This subject matter is not going to go away.
New legal challenges are appearing all the time aiming at the review scheme outcomes
Groups are forming, with funders and lawyers, in anticipation of challenging the banks irhp review decisions and assessments of credible losses.
The area is becoming a minefield for IP’s but from a victim perspective the matter is becoming less opaque with the only question that needs to be answered positively being ;
“but for the irhp contract would my business have avoided the insolvency process ?”
From this stems an array of other issues that need to be addressed including;
- disclosures by banks in annual audit PN16 requests, IBR reports and scoping agreements
- dealings with the bank for breaking irhp contracts to increase indebtedness ‘by agreement’
- details of any breached loan covenants as the reason for an appointment
- benchmark Libor interest rates and currency issues in the irhp contracts
- legal set off rights for the bank in acceptance of any review offers
- and so it goes on …………………
but the biggest question is “if an IP accepts an offer of redress from a bank in the FCA irhp review scheme are they liable if the scheme does not deliver ? “
At Insolvency Assist we specialise in irhp missales and insolvency; both in the FCA review and litigation. Our tailored service allows a no cost overview on a case by case basis, illustrating the case points and service partners to ensure each claim has due consideration with an Opinion on file.