Investigation into Tyre / Wheel supplier

Investigation into an independent supplier of tyres and wheels

• Forensic analysis of electronic data.
• Identification of pre-invoicing / fresh air invoicing.
• Claims of circa £1m identified.

Situation

Mazars were appointed as Administrators over an independent supplier of tyres and wheels.

Following a period of trading, Mazars achieved recoveries of circa £300,000, including a sale of the business and assets of the company.

The Contentious Insolvency Team were subsequently engaged to determine whether there were any potential rights of action that could result in additional recoveries for the benefit of creditors.

Approach

An information recovery exercise was conducted, which included securing, imaging and processing numerous sources of electronic data.

The information recovered was extensively analysed and it was identified that the company had been participating in pre-invoicing / fresh air invoicing, resulting in a loss of circa £800,000.  This was a clear breach of the terms of the financing agreement that was in place. 

Investigations were also conducted into the company’s accounting data and bank statements, which resulted in the identification of further claims under the Insolvency Act 1986 / Companies Act 2006 of circa £200,000.

Outcome

Significant return to secured creditor directly from the Administration and settlement agreed for the balance, arising from the claims identified by the Contentious Insolvency Team.