Thursday, 27 January 2011

a reportedly strange IVA - why do the creditors not also want the fruits of the racehorses and classic cars?

The London Evening Standard is reporting on a rather large and rather strange IVA that seems to exclude some rather valuable items from creditors. The story notes that Mr  Pierre Rolin, "a former top executive with investment bank Credit Suisse, is trying to reach a settlement with his creditors to avoid bankruptcy. Mr Rolin, 56, allegedly owes the taxman more than £2million while the Clermont Club casino in Berkeley Square, has sued him for £75,000.The biggest claim is from a Gulf property millionaire who alleges Mr Rolin fraudulently issued invoices totalling £30million." The story goes on to note that, "All of Mr Rolin's assets, including racehorses and five classic cars would be ringfenced in an Individual Voluntary Arrangement in case he has to pay the Gulf client."

The fact that the racehorses and classic cars, presumably expensive assets, are reportedly outside the terms of the IVA seems a little incongruous. What is it about the hiving out of these expensive assets that makes the rest of the proposal so attractive? If they were also sold off to placate creditors would they not bring further valuable realisations? This is truly a composition between debtor and forgiving creditors. The legality of creating an IVA so as to put assets beyond the reach of a £30 million creditor also requires closer examination.


Meanwhile, Aston Villa's goalkeeper is fighting off a £5 million bankruptcy action in the United States. The Birmingham Mail notes that, "This is a technical bankruptcy and it is not anticipated that it will be in place for long as an application for an annulment will be submitted in the next few days.”

Picture Credit: http://www.michaeldodsracing.co.uk/imgs/winning-race-horse.jpg (the horse and jockey featured in the picture have nothing to do with the story mentioned above).

1 comment:

David Butler said...

I suspect, like so many newspapers when reporting on insolvency issues, The Evening Standard has got the wrong end of the stick - as it says above the assets are to ring fenced IN an IVA, which is what you would expect. "Ringfence" in this context is referring to the fact that creditors with non-provable debts cant lay claim to the debtors assets which are included in an IVA.

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