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A practical guide to recovering assets

Recovering assets in litigation is becoming increasingly more complex. This is due to the global scale of where assets could be located and the difference in country laws and procedures to recover these.

We have noticed a significant increase in early enforcement becoming a key focus for creditors over the past 12 months in the UK – particularly where litigation funders are involved. Similarly, courts in the Caribbean region are showing themselves to be creditor friendly, with a willingness to consider alternate enforcement or protection remedies during the process. Asset recovery experts from across our member firm network share their experiences and knowledge around practical issues when recovering assets.

One challenge for those tracing assets is the difficulty of getting an initial lead to the location of potential assets, particularly in cases where there is limited data available. Stephen Michaelides, partner, Grant Thornton Cyprus, says: “In Cyprus, access to public record information is often limited and only becomes obtainable once you can prove you are entitled to the information. In most cases this would be via a formal insolvency process or court appointment.”

Structure and character

Margot MacInnis, director, Grant Thornton Cayman, supports this by adding: “Any strategy for asset recovery must take into account different legal regimes, access to the court and the ability to obtain the necessary powers to control and pursue assets. The legal structure and character of the interest in the assets, such as an investment in a private equity fund versus a loan secured against assets, will impact the strategy for recovery.”

“Careful planning and thought at the outset of an appointment and the early involvement of an IP to assist with the strategy and ensure powers are obtained are beneficial when recovering assets – this can often save significant time and costs in the future.” MacInnis says.

When considering how recovery strategies change or are influenced by the jurisdiction in which an asset is located, David Bennett, managing director, Grant Thornton Hong Kong and China, says: “A lack of planning can lead to increased costs and a failure to recover assets. For those jurisdictions with less transparent legal systems, local political connections can be enough to shield parties from enforcement attempts. Therefore it is important to research the counter-party and understand its standing and local influence.

Perception of risk

“There is a perception of uncertainty and risk in the market, arising out of shifts in the landscape through Brexit. With risk comes change, which will likely lead to greater instances of fraud, the need for more litigation, as well as asset tracing and recovery services. The legal market is constantly evolving, with regular changes in case law” says Michael Leeds, partner, Grant Thornton UK. “Asset recovery experts need to be alive to these changes and how they can be implemented.”

To read more from our experts download the PDF article here from Corporate Disputes magazine Oct-Dec Edition. For further information or support with asset tracing please contact Stephen Michaelides.