IVA Successfully Overturned

Image: Francesco Ungaro/francesco_ungaro/Unsplash
Image: Francesco Ungaro/francesco_ungaro/Unsplash

Greenhalgh Kerr successfully overturned a debtor’s IVA and obtained a bankruptcy order, in order to allow trustees in bankruptcy to investigate a suspicious property transaction.

Case Details

Greenhalgh Kerr were instructed by a finance company to pursue a bankruptcy petition for more than £450,000 due under various hire agreements that had been personally guaranteed by the debtor.

The debtor sought to avoid bankruptcy, by proposing an individual voluntary arrangement (“IVA”).  We reviewed the proposals and highlighted several areas of concern.  The proposed IVA excluded the debtor’s residential property from the assets available to creditors, on the basis that the debtor had, prior to the petition, transferred the bulk of his beneficial interest to his wife (“the Transfer”).  Further, the debtor claimed to owe substantial sums to companies controlled by himself and/or his wife (“the Associated Creditors”).

Initial view

At an initial hearing of the petition, Greenhalgh Kerr raised these concerns, and obtained orders directing the debtor to provide specific disclosure as to the Transfer, and his indebtedness to the Associated Creditors.  The debtor provided limited documents, but failed to provide the specific disclosure required.  Shortly thereafter, the IVA was approved by creditors (despite our client voting against the IVA).

We advised our client that the IVA could be challenged on the basis that there was material irregularity in the approval of the IVA, and that the IVA unfairly prejudiced our client’s interests.


Greenhalgh Kerr filed an application pursuant to s262(1)(a) and (b) of the Insolvency Act 1986, seeking the revocation of the IVA, which would enable our client to seek a bankruptcy order on their existing petition.  We filed detailed evidence noting that a trustee in bankruptcy could potentially challenge the Transfer as a preference or transaction at undervalue.  We also highlighted deficiencies in the purported loan and guarantee documents relied upon by the Associated Creditors, noting that the documents provided did not justify the sums claimed to be owed, and that without this overstatement the required 75% threshold would not have been reached.

Final hearing

Following a two-day hearing, Greenhalgh Kerr obtained orders revoking the IVA, and declaring the debtor bankrupt.

Greenhalgh Kerr’s in-depth knowledge of the Insolvency Act enabled us to protect our clients’ interests by successfully overturning the IVA, thereby allowing a Trustee in Bankruptcy to properly assess the validity of the Associated Creditors’ claims, and to investigate the Transfer, in order to maximise the assets available to creditors.

Greenhalgh Kerr
Olympic House, Beecham Court,
Smithy Brook Rd,
Wigan WN3 6PR

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+44 (0)333 200 5200

We are confident in our work and we know that recoveries is a key part of a lender or creditor’s business

We are confident in our work and we know that recoveries is a key part of a lender or creditor’s business. We have designed our pilot projects to give lenders and creditors the comfort and confidence in our service before formally and fully switching recoveries providers. This time also allows new clients to benchmark our service levers and results against existing providers and others.

How it works


You choose 10 recoveries cases

You choose 10 recoveries cases to get us started. We’ll deliver our usual onboarding protocol where we’ll get to know you and your systems, culture, methods, preferences, and requirements.


We get started

We assess each case by setting a strategy then grading and reporting on the case in terms of prospects and timescales and cost. We make immediate contact with debtors, and pursue a recovery in our tried and tested ways.


We review

We deliver ongoing, structured, tailored reports as per your needs and carry out a full 3-month review on these 20 cases. There we’ll discuss how we have worked together, patterns we have seen in your borrowers, your systems, your documents, your pre-legal conduct, outcomes, highs and lows, legal costs (and costs borne by debtors), and possible improvements in all of these.


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We carry on working in this way until all cases have been concluded. You are then free to carry on your discussions with us or to use the experience and market intelligence gained by working with us in the future.

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