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Potential legal action against First London

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The administrator of failed bank First London has revealed that it may take legal action against the company for transferring assets out of the company before going out of business. It is alleged that the company sold its assets at an undervalue to third parties. Its main asset First London Asset Management (FLAM) was moved into a holding company. It was then sold on to a related company, Swiss Commodity Holding.

The Administrator’s report said “My investigations reveal that all of the subsidiary investments that the company disposed of, namely FLAM, were disposed of at an undervalue and not at arm’s length and are therefore challengeable and avoidable … I have instructed my solicitors to draft proceedings against various parties.”
Meanwhile lawyers acting for the company, McFaddens, said in a statement “The assertion that the transfer of assets is null and void is denied. Our client has not been served with any formal notice by the administrator with regard to this claim. If the administrator decides to take action as described in the report then our client will defend the same vigorously. It is denied that First London Asset Management Limited was sold at ‘an undervalue and not at arm’s length’, but even if it were, it is a moot point as the transaction for the purchase of FLAM was rescinded in September 2011.”

The company had debts of over £8million before going into administration in mid 2010.

Written by Andrew Hodges

February 7, 2012 at 11:08 am

Posted in Comment, LinkedIn

Tagged with , ,

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