The recent High Court judgment in Re CGL Realisations Limited (In Liquidation) in favour of Geoff Carton-Kelly as additional liquidator of failed electrical retailer Comet ordered the company’s former French parent, Darty, to pay over £100m to restore the preferential repayment of an intercompany loan owed to Darty in the run-up to Comet’s sale shortly before its insolvency. The additional liquidator was appointed in 2018 by the court specifically to investigate the circumstances of Comet’s sale in advance of its demise in 2012.
The successful judgment came after almost a decade of various regulatory reviews and challenges in respect of Comet’s insolvency and may ultimately lead to a meaningful dividend to unsecured creditors, who until now had received nothing more than a nominal return.
Despite numerous legal and practical hurdles along the way, including appeals to preliminary decisions, missing and aged records and a scarcity of funds to bring legal proceedings, FRP were successful in securing judgment on behalf of Comet’s creditors.
Such issues are typical of many complex litigation matters involving asset recovery, contentious investigations and insolvency. Lack of funding, poor records, delays causing issues with access to and recall of witnesses as well as limitation are all commonly encountered and can quickly sound the death knell for many cases.
However, where cases have real merit, having a tenacious, collaborative and joined-up team can lead to great success even in the most challenging circumstances.
The Comet case showcases how FRP’s experts in forensic technology, forensic accounting, investigations and contentious insolvency work seamlessly together as one team with legal advisors and funders to build a robust litigation and recovery strategy. That team approach can be of benefit for many litigators involved in disputes which require an element of forensic investigation and / or asset recovery.