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London Capital & Finance - Case Update
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A defendant in the London Capital & Finance fraud case can’t use the proceeds of sale of his home to pay his solicitors from Kingsley Napley, who are owed over £2m, the High Court has ruled.
London Capital & Finance entered administration in January 2019, after the FCA took action against it for marketing its bonds in a misleading, unfair and unclear manner. Finbarr O’Connell, Adam Stephens, Colin Hardman and Henry Shinners of Evelyn Partners were appointed joint administrators.
In December 2020, the joint administrators issued claims against 15 defendants seeking to recover c.£237m of bondholders’ funds. The trial commenced in February 2024 and continued until mid-June. Any judgment is likely to be given during the Michaelmas term of 2024.
Paul Careless, one of the defendants, was the majority beneficial owner and one of the directors of Surge Financial Limited, which acted as a marketing and digital services supplier for London Capital and charged a commission of 25% of gross receipts raised from bondholders. Mr Careless sought permission from the Court to sell his home for £2.25 million and to use the net proceeds (expected to be £2.175 million) to pay his lawyers, owed about £2.16 million.
The Court refused, finding that Mr Careless had not established that he has no assets other than the property from which to meet his legal costs. In addition, there was nothing to suggest that the joint administrators had lulled Mr Careless or Kingsley Napley — who had run the risk of continuing to supply legal services on credit — into a false sense of security that they would be paid.
The decision can be found HERE. Stephen Robins KC, Andrew Shaw and Daniel Judd (instructed by Mishcon de Reya) represented the joint administrators.