VE Vegas Investors IV LLC and others vs Shinners and others  EWHC 186 Ch
The applicants were creditors of VE Interactive Limited (In administration) (“VE”). VE encountered financial difficulties and its directors sought insolvency advice from insolvency practitioners at Smith and Williamson (“S&W”) and appointed them to advise on and effect a pre-pack sale of VE’s business and assets.
S&W experienced difficulties in obtaining financial information and clarity over the extent of the sale assets from VE. This caused issues in finding an arms’ length purchaser and only one external purchaser was identified.
Insolvency practitioners from S&W were appointed administrators of VE by the court but they did not report the problems that they had had in obtaining sufficient information from VE’s directors when applying for the order. The day after appointment, the administrators then sold the business and assets to a new company set up by the VE directors.