Webcast: Legal finance in cross-border insolvency and asset recovery

In a recent webcast with Lexology, “Follow the money: Legal finance in cross-border insolvency and asset recovery,” Joe Durkin and Quentin Pak explored the role of legal finance in supporting cross-border insolvency proceedings and asset recovery efforts. The discussion featured insights from Fergal Power (Interpath), Tim Symes (Stewarts) and Andrew Willins KC (Appleby), examining the practical challenges of tracing, preserving and recovering assets across jurisdictions, and how legal finance can help overcome these obstacles.

You can watch the webcast below.

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Quentin Pak:
Good morning, good afternoon, good evening, everyone, wherever you may be joining from. Welcome to the Lexology Masterclass Series of Webinars. My name is Quentin Pak, and I'm from Burford Capital , based in our Singapore office, and I will be the moderator for today's discussion. So, the subject of today's masterclass is legal finance in cross-border insolvency and asset recovery. We will be focusing on how insolvency practitioners go about identifying, preserving and recovering value of the insolvency estate, the legal tools and mechanisms that they have. We'll also touch on legal finance, as the title suggests, how the funding of litigation proceedings and asset recovery processes have emerged as an increasingly important tool for office holders to pursue claims. For today's discussion, we are delighted to have a panel of very experienced practitioners to share their views and experience.

Let me introduce them to you briefly. So, first, we have Andrew Willins KC. Andrew is the Managing Partner and practice group head of the dispute resolution department in the BVI at Applebee. He has over 25 years experience as an advocate drawn from his time at the Chancery Bar in London, and also since 2008, in the British Virgin Islands. He has particular experience in insolvency litigation, shareholders disputes, and in complex commercial litigation, including cross-border fraud and asset tracing claims and the enforcement of judgments and awards. He was appointed King's Counsel for the territory of the Virgin Islands in April 2025, which was the first appointment for over 12 years at the time. So, next, we have Fergal Power from Interpath. Fergal is the Managing Director and CEO of Interpath's operations in the Asia-Pacific region.

He has over 25 years of experience in restructuring, insolvency and banking advisory work in the region. During his career, Fergal has led numerous high-profile insolvency assignments. So, no doubt, he'll be sharing some of his war stories today later on in the discussion. Next, we have Tim Symes, who is a partner in Stewarts' insolvency and asset recovery practice. Tim has over two decades of experience as a contentious insolvency and asset recovery specialist. He takes on complex, high value mandates, frequently spanning jurisdictions to recover assets for insolvency estates and stakeholders. And he will discuss some of today's issues from an English law perspective. And last but definitely not least, because he's my colleague, we have Joe Durkin from Burford Capital in our Dubai office. Joe is a Senior Vice President at Burford, which is the world's largest provider of legal finance. And he has responsibility for assessing and underwriting legal risk as part of Burford's investment team.

And like I said, he's based in our Dubai office. So, let's jump right in. We have one hour today. To set the scene for the discussion, let's start with a situation where you have an insolvent company. Now, maybe I'll start with you, Fergal. You can imagine we have an insolvency company potentially going into liquidation, and let's say it's a contentious insolvency situation. So, with potential wrongdoing by some of the company stakeholders and questionable transactions. And then there are different jurisdictions involved. The company may be in one jurisdiction, assets in another juris- jurisdiction. So, it's all horribly messy. So, Fergal, when you step into a situation like this, what would be the first things that you'd be thinking about?

Fergal Power:
Thanks, Quentin, and good morning, good evening, everybody. So, when or if I'm first approached about a business that is insolvent or likely to enter a formal insolvency process that may give rise to significant claims or a recovery exercise, my immediate focus firstly, — take a step back, is to firstly understand the business and its operating model, whether that be real estate, crypto, consumer retail, financial services, business and operating model, critically understanding that in the first instance. In doing so, I'm seeking to understand where the value sits within the business, what are the risks to that value, and who currently controls the assets, the records, systems, bank accounts, and information. The reality is, at that stage, the facts are often incomplete. There'll maybe well be allegations of wrongdoing rather than established misconduct. So, and also to add, probably very little cash to help you investigate.

So, taking a hypothetical example, and one very common scenario that we witness in Hong Kong, a Cayman or Bermuda incorporated permanent company that is listed in Hong Kong stock exchange with borrowing in Hong Kong, operations and records are in mainland China, perhaps in Southeast Asia. Two, it's got a distribution footprint across Europe and the United States with IP scattered across the world, and it's financed also by European debt. There may well be allegations of fictitious trade transactions, debt ramping, related party dealings regarding asset disposal or assets potentially moved into property or crypto for personal use. You know, what might well be regarded as a well-structured business that's operationally efficient, it's very different when the music stops, and the immediate challenge is to understand where or what value remains, where it sits, and what is, what is the risk of that disappearing.

For me, the key things to understand are, first, understanding the group structure, the flow of funds, which entities borrowed money, which entities received it, what cross-collateralization guarantee arrangements exist, and where do the assets, the records, potential causes of action sit within the group. Second, understanding of what assets information may be vulnerable to loss or dissipation. And thirdly, what jurisdictions are we dealing with, as I mentioned earlier on, Cayman, BVI, Hong Kong, China, Southeast Asia, Europe, United States, the full gambit.

And also, I get to think about where there are allegations of fraud or misappropriation, there's also the question of whether there are any identifiable recovery opportunities where assets may appear to have been moved beyond the corporate structure as well. So, we're thinking about the buildup of motor wealth. Assuming an appointment follows, then I think the attention turns to securing practical control of the information, the records, the systems, and the assets while forming an initial view regarding recovery options.

Quentin Pak:
Right. Okay. No, that, that's very, very interesting. So, maybe we move on to the counsel's perspective. Tim, maybe we'll start with you. So, you get a call from Fergal, saying to you exactly what he just said, and with very limited information, and obviously at this stage, you assume there's also very, very few assets in the estate that you can get access to. What would you want to know? I mean, what would you be thinking about?

Tim Symes:
Yeah, exactly that. You know, few assets in the estate and you know, a paucity of understanding of where everything is. So, if the facts aren't clear as they won't be and the pot's limited, you can't investigate everything. You have to identify the questions which you think will change the strategy and give you some disclosure ASAP. So, for me, the four basic questions would be, what is the claim? Who are the realistic defendants? Where do we think the value has gone? Not an easy question. Crucially, you know, if you're successful, what might you actually realistically be able to recover? On the claim, I'd want enough contemporaneous material to understand the cause of action. Limitation obviously is important. The basic evidential case as far as you can with what you've got.

But in fraud and asset recovery work, you have to accept that the complete picture may just not yet exist and probably won't. The missing information is often held by banks, investment houses, fiduciaries, corporate service providers, and other innocent intermediaries. With a sophisticated fraudster, you should assume that the misappropriated value won't be sitting in their own name. It'd be lovely if it did. They wouldn't be a very good fraudster if it did. It will usually have been converted into other assets placed behind companies, structures, nominees, other structures, with as much documentary and structural noise as possible between the target and the value. So the question isn't simply whose name's on the asset, it's who controls it, who gives the instructions, who receives the benefit, and where did that value go next? Historical records may identify substantial value at an institution without showing its ultimate destination, but still really useful because that gives you a rational starting point for targeted disclosure, obtain the account opening, KYC, transaction material, and then you can use that to identify the next link in the chain.

The third issue, is whether advanced notice will defeat the purpose. If notifying the target is likely to lead to records disappearing or assets moving, you should probably assume that they will, and therefore consider an application on, you know, on a seal and gag basis, non-disclosure relief basis. It is exceptional relief, so the risk has to be properly evidenced and application properly made out. Finally, there's the commercial question, will the proposed steps produce evidence or an asset which can be enforced again at that early stage, those different outcomes? So, in conclusion, with limited funds, I'd spend that money on a focused document review, what have you got, a sensible financial chronology, perhaps local advice in the most promising jurisdictions, and one of two well-chosen disclosure applications. The aim at this stage is to convert suspicion into reliable evidence whilst preserving the ability to act if the evidence identifies something recoverable.

Quentin Pak:
Right. Thank you, Tim, and what about you, Andrew? I mean, if we take the hypothetical example that Fergal came up with, a lot of the companies could be incorporated in the offshore jurisdictions, BVI, for example. I guess the tools that are available to you, the things that you would look for could be slightly different from what Tim had just mentioned, but what's your perspective?

Andrew Willins KC:
Yeah, I agree with everything that Tim and Fergal have said. My experience, certainly when you're dealing with Asian structures, is that there's generally a BVI, Cayman, Bermuda topco. There are then operating vehicles, sometimes intermediary holdcos perhaps in Hong Kong. And then perhaps the operating entities are in People's Republic of China, or elsewhere. And so, if Fergal were appointed, and let's just take his example, I think, over a Hong Kong entity, the starting point is obviously going to be to look, as Fergal says, at the group structure. Where do the assets sit? Where are the subsidiaries? In which jurisdictions are they located? How easy is it to protect them? The next step is obviously to gather together books and records. Now, if you've got a BVI company, and this does happen, that goes into liquidation abroad, let's say, in Hong Kong. In theory, the office holder should be able to obtain the books and records that are held by the registered agents in the BVI.

If there are any difficulties with that, there are routes under Part 19 of our Insolvency Act, to obtain assistance from the court. The practical reality from a BVI perspective is that the assets are never here. There aren't bank accounts here. The assets, if they are here, take the form of shares in companies where the assets will be elsewhere. So again, as Fergal says, the next step is going to be an assets investigation: work out where those assets sit, work out which are the most promising jurisdictions, particularly if money is short in order to recover ,and then target the instruction of experienced counsel in each of those jurisdictions. And it's important, I think, to do that early and quickly. And firstly, in some jurisdictions, there are limitations on the number of local advocates that can be appointed.

Secondly, it, it's necessary to get the local lawyers involved, I think, at a early stage in order to gather together information. And I think we may turn back to Norwich Pharmacal Relief in due course, but an officeholder has its own statutory powers, but a creditor has the ability and appropriate circumstances to apply to the court for Norwich Pharmacal disclosure relief in order to obtain from the corporate services provider information in relation to who owns and controls the companies. And then once you've got that information, really, the next question is, what are the assets? Where are they? How liquid are they? How easily dissipated are they? Is there a way to stop dissipation, perhaps because there are professional directors in place and they're unlikely to do anything inappropriate? And obviously, this goes back to really where we started, which is from an officeholder's perspective, if they are applying for injunctive relief, which may be necessary, or indeed if they are taking steps to collapse the structure, take control of subsidiaries, perhaps put them into liquidation in order to pursue claims, funding is going to be essential to that and it's going to be particularly important if they're exposed to undertakings and damages.

Quentin Pak:
Okay. Well, let's, let's pick up the points on funding then. It's clear from what everyone has said so far is that prioritization and the application of funds is gonna be crucial because you'll be at the initial stages of reviewing documents, doing asset investigation, and working on what potential claims there would be. And one of the ways, that obviously insolvency proceedings get funded would be by an external funder. So Joe, if we move on to you, could you just talk us through what a funder would be looking for when they consider investing in an insolvency situation like the ones that we're looking at?

Joe Durkin:
Yeah, thanks, Quentin. I suppose every situation is different that comes across our desk. You know, at the moment, I'm looking at things for officeholders, which are as broad as a construction business which has gone under, and that requires putting some gray matter into, you know, construction claims and EOT and sort of such things look like. But when you're dealing with, let's say, matters such as Fergal mentioned where you have potential fraud, it's spanning across multiple jurisdictions, touching in the Caribbean, touching on the US and so on, we're quite often brought in early by lawyers, but we can come in later as well. And in that process, I mean, the first thing that we're trying to do is get a good sense of the merits of the case. I mean, can you win a legal judgment in whichever the primary jurisdiction is?

And sometimes we're asked to come in when there is already a judgment in the case of a lot of the stuff we do for banks. But in the merits analysis, that's really assessing the legal opinions and does the case stack up? But in the context of fraud, quite often you're at a slightly earlier stage. And the way that we're set up is we do have an in-house asset corporate intelligence team, and we're willing to split into various stages. So it isn't unusual for us as a business to come along and say, "We will cap a certain amount of money, which can be used for discovery." So for example, 1782 applications in the US to help the office holder get the information that he needs to establish where assets might be. To Andrew's point, you may very well have a Cayman structure, but how do you know where, where the money is ultimately going to sit?

Is it gonna be in a Swiss bank account? And can you get that through intermediary bank discovery? So quite often we are asked within the merit analysis to assess where assets might be and whether or not there's the ability for us to put some budget towards that. At the same time and in parallel, we will be looking very much at the economics of all of this, and it's never just about the damages of the ultimate judgment. You have to tie in what are we going to recover? As Tim mentioned quite often, you're dealing with sophisticated promoters, assets are dissipated, they're hidden in strange structures and strange jurisdictions and Bitcoin and assets and so on. So you're really trying to get into how are you gonna make recovery? And it doesn't necessarily mean that you have to have sight in recovering everything, but early on, you want to get a sense of there is some asset pool almost, you know, defensively that we could say, "We see a route here upon which we can move to the next stage." I guess it's a given that when it comes to things like enforcement, that if you do have a judgment, that ultimately will be enforced in a jurisdiction where you do need to enforce it.

So a lot of the stuff that we do in the UAE, you will screen, first of all, for whether or not it's a default judgment and whether or not service has been effected on the defendant effectively and so on. So they're the kind of key pillars, merits, the economics as a stack up. There has to be proportionality. If we're going to be putting several million dollars into a matter, you need to be able to see a route through for which after our return, there's enough there for the estate as well.

Quentin Pak:
And Fergal, given what Joe just said and also the fact that there are so many competing priorities, for any given amount of funding or funds that are available within the estate, how would you prioritize what to apply the money to? I mean, presumably, the preservation of assets would come to mind as being the most time sensitive, but at the same time, you would also want to work out whether there is a viable claim. So how do you think about applying the money that you have?

Fergal Power:
Yeah, tough one. It really is where there is limited capital, it's really a balancing exercise. You know, on one side, does spending produce a return quickly? On the other hand, is spending that may not return anything directly, but is absolutely mission critical to the overall success of the administration. So for example, if we don't do it now, we could damage or lose recovery later, and we need to get that balance right, and above all, keep our options open as we proceed through the administration. So with regard to that, I'd start, if funded by a funder, I'd start by agreeing with the funder what the first tranche has to achieve. And to Joe's point, you know, is there a uncertainty regarding the merits of a case, the evidence, or whether anything realistically can recover? And that will help us direct, I think, around where the money goes first.

You know, arguably, mission-critical spending comes first. I mean that has to focus on maintaining access to accounting records, email data, holding onto the finance people who know where things are, where the bodies are buried, and if there's credible evidence that an asset is about to move, taking urgent advice and preserving that asset. None of that generates cash on its own, but losing those records or an asset at this stage can undermine everything that follows. However, there's also the argument about pursuing low-hanging fruit, there may be receivables that we can collect, a bank balance we can secure or surplus assets, or quite often as we see here, listed securities, that you can realize quite quickly. Those quick recoveries can help fund later work. They can reduce what we may need from a funder, and they also can show creditors some early progress.

And it also gives the funder more confidence in the case, I think. Beyond that are just two key points. I'd say whatever we do, it's around proportionality at an early stage around the investigative work, retaining optionality, avoid committing the whole budget to one roof very early on, and keep something in reserve for something unexpected. And finally, and then we'll get to this, I'm sure, there's no point in obtaining an order if we can't afford to defend it or take the next step, I would dare say.

Quentin Pak:
Yeah. So it's interesting you mentioned, Fergal, the strategic value of funding. I mean, I'd be interested to hear from, from Tim and also Andrew. Apart from providing the funds to facilitate the, the processes that you need to undertake, as part of the, the fact-finding process, I mean, how do you see the use of funding as a strategic tool? And also, like Fergal said, signaling to creditors, to potential wrongdoers.

Tim Symes:
Who do you want first? Should I go first?

Quentin Pak:
Yes, please. Yeah.

Tim Symes:
Sure. So, the obvious answer is funding will pay for the work, which, you know, enables work to be carried out in the first instance. So absolutely critical on that basis, if you could call that a sort of a strategic consideration. The theme that comes out of what Joe and Fergal said is it needs to be phased because at the beginning, you know very little, by the end, hopefully you know a lot, enough to ultimately succeed. Where funding's involved, the funder will want to know what each phase is going to achieve and what the intention is once that phase is achieved - you know, looking beyond there, to the next one.

So the first phase might focus on a focus merits review, analysis of historical banking material, local advice, which was touched on, and perhaps targeted disclosure application. You can then use that result to decide where the next tranche of money should go, and obviously you'd be working with the funders on that to unlock that next phase. Funders tend to like insolvency. I don't need to tell you this, you know, insolvency recovery matters where there's a credible route assets, of course they do, and that's critical. So the question isn't simply whether legal claim is good, it's where there's a realistic route from judgment to recovery. Recoverability, has to go hand in hand with merits. You can't have one without the other. Well, you can, but then you don't really have a viable claim. That matters because disclosure applications don't all produce the same result.

One might identify location of an asset, another might confirm the route that's taken several years ago. So historical evidence might be valuable, because it points towards another institution or jurisdiction, but it might not justify immediately funding full-blown proceedings, so phased approach. Funding also allows the officeholder or claimant to pursue several coordinated steps, a really important benefit of funding. One jurisdiction may provide evidence about an investment account, another may provide information about international payment flows, and the main proceedings may preserve the underlying claim. The individual steps only really make sense when viewed as part of one recovery plan. So a good funder will test whether each expenditure is likely to improve the recovery prospects in an incremental phased way, I would say. What evidence will this application produce? What do we want to do with that evidence?

What's the next application going to look like? What's it going to reveal? And at what point actually do we stop? It has to be a rational consideration, unfortunately.

Quentin Pak:
Yeah. Andrew, anything you'd like to add?

Andrew Willins KC:
I think Tim has hit the nail on the head, as has Fergal. They have focused on where the funding should be spent, and I don't have anything to add to that. I think your question, also sort of touched on another issue, which is really how can funding benefit, a liquidation or a litigation? So in other words, how is it a strategy? And as Tim says, without the money, the work's not going to get done, so that's the obvious glib truism. But I think there are a couple of other points to be made. I mean, firstly, from a lawyer's perspective, my experience is that outside, obviously, of professional officeholders, clients can be quite reluctant to engage with the initial spend on asset investigation, whereas funders absolutely require it because they want to know that not only is the claim one that has a decent prospect of winning, but that there's going to be a pot of gold at the end of the rainbow as well.

And so I think from a lawyer's perspective, it's actually an extremely useful tool, to be able to persuade clients that this is a worthwhile piece of expenditure, investigating where the assets sort of sit and, as I said earlier, how liquid or movable they are. Secondly, we've touched on interim relief, and I think we may come back to it, but it's obviously an incredibly powerful tool, at least if it's used correctly. And if the funding unlocks that, then it's obviously extremely useful. And then if you sort of stand back from all of that and you think of it from the perspective of somebody like Fergal, an officeholder. I think the funding probably has other less tangible uses too. Firstly, it shows neutrality and independence. They're not relying on a particular stakeholder in a liquidation to provide the funding.

And that obviously does give rise to concerns and suspicions by other affected or interested parties. And the other thing is that in many jurisdictions, mine included, when you take proceedings against defendants. You've generally got to go to the court, in order to obtain sanction to do it. And if you don't require sanction, you're almost certainly going to have to go to the court of the creditors committee at some stage in order to get approval for the fees. And so obviously, the fact that a funder has sufficient confidence in the claim that they're prepared to put their money behind it is an extremely powerful tool for an office holder trying to persuade a court, a supervising court or the creditors committee, that the claim is one that should be brought.

Quentin Pak:
Right. Thank you. Thank you, Andrew. So funding, I think it is clear the value that funding brings not purely financially, but also as a strategic tool that in some ways could influence how things progress. Now I'd like to just shift gears a little bit. We've talked about funding. The other word that is most commonly mentioned so far in this discussion is jurisdiction. So onto the jurisdictional dynamic in any insolvency situation, maybe I'll come back to you, Fergal, first. Now in your example where the company is organized in one jurisdiction, but there may be reasons to bring proceedings in another jurisdiction, the assets are in the third jurisdiction and so on, there are implications of doing certain things, carrying certain steps in different jurisdictions.

So let's start with recognition of the actual insolvency proceedings. When might you want to have the proceedings recognized in different jurisdictions, whether it's the jurisdiction of the company or elsewhere?

Fergal Power:
In short, we would need to consider recognition when we as office holders need to exercise our functions outside the jurisdiction of our appointment, and our existing authority is insufficient in that jurisdiction. So it's not accepted by the people that we deal with in that location. So the starting point is to identify exactly what we need to achieve in that jurisdiction where we perhaps are not being recognized. And the example I mentioned earlier on, it came at appointment, but the operations bank accounts are in Hong Kong. A Hong Kong bank may require formal recognition before accepting instructions or providing any information, notwithstanding that the directions from the court that's given quite often, just simply they refuse to cooperate. Elsewhere, we may need court assistance to obtain documents, protect assets, or support our investigations. So from a officeholder's perspective, I think it's important to distinguish between recognition of appointment from particular powers of assistance available afterwards.

And in that regard, at an early stage, it's important that we get local counsel to assist us to establish what exactly the court can actually authorize for us. And that's really important, I think, in a jurisdiction like Hong Kong, very, very relevant, where recent decisions have been judges taking different approaches to the assistance available to foreign office holders. So from our perspective, we need to be precise about the company that we represent. If for example, we're appointed over the parent or the topco, the money and the records may belong to the subsidiary. So we will need to establish a route to that subsidiary's information and assets. And that may involve enforcing or exercising shareholders' rights, securing cooperation, or a separate appointment subject to local advice. So critically regarding recognition, timing is important. Identifying the need for recognition at an early stage, but also in parallel, and this goes back to Andrew's point on injunctive relief as well, asking council whether urgent protection, protective measures are available while recognition is being pursued because it can take time.

Finally, I would say in with regard to recognition, the cost of obtaining, it needs to justify itself and need to a practical outcome. I would want to know what recognition unlocks and what further applications may be required, whether banks or custodians or local managers will comply upon receiving the necessary recognition order. So instructing Tim and Andrew, my instructions would be around what is the information or the asset that we need to protect, what are the obstacles, and what is the urgency? And that would form part of our recovery plan.

Quentin Pak:
Thank you, Fergal. Well, then let's come to you, Tim, and Andrew. I mean let's break down the process. Tim, maybe we start with you first. In terms of asset preservation, what are the tools that are available for office holders like Fergal? And then following on from that, Andrew, maybe if you comment on later down the line, the discovery process and judgment enforcement, what are the different tools that you have at your disposal?

Tim Symes:
Sure, thanks, Quentin. From an English perspective, I tend to divide the toolkit in the same way as the practical exercise, trace, breeze and recover. At the tracing stage, the most useful information is often held by an innocent intermediary, banks, et cetera. Norwich Pharmacal order can require a third party, which has become mixed up in relevant wrongdoing to provide information needed to identify wrongdoers and establish the nature of the wrongdoing or trace assets. It has a dual use, a useful dual use. It can not just identify people behind the transaction, but it can also provide information which advances the tracing exercise. In practical terms, that may include account opening documents, KYC, beneficial ownership information, statements, payment instructions on an onward transfer details. The court will want a good arguable case of wrongdoing, respondent likely to hold the information in an order which is necessary and proportionate.

It's not just granted because the information would be useful, so you have to get your ducks in a row on that. A banker's trust order is slightly different. It's directed more specifically at tracing, preserving or recovering assets in which the applicant claims proprietary interest. The applicant needs to show a real prospect the information will help locate, preserve, or recover the assets. Often, the banker's trust application can be made in conjunction with the MPO.

Often the real value isn't the immediate answer, it's the disclosure lets you formulate the next step. So information from one institution points towards another institution account or jurisdiction. We've seen that process repeated across several offshore mainland jurisdictions, you know, a domino type effect, but in a good way. Section 1782 gives you a different route in the United States. Hugely powerful tool. In an appropriate case, it allows a US district court to order discovery from a person or institution found within its district or use in foreign proceedings. Banks are classic targets. An intermediary bank discovery, super useful. The question isn't where's the money? It's which institution saw the money move. I mean, you'd love to know where the money is, of course. A very large proportion of international US dollar payments pass through the correspondent banking and clearing systems in New York, even where the sender and recipient are elsewhere.

So that route through New York leaves a record and the intermediary may never have held the customer's account, the target, but it may hold information showing the sending and receiving institutions, dates, values, other details which help reconstruct the payment path and widen your picture. There are still jurisdictional questions about which respondent can properly be pursued in which federal district. So the targets and forum have to be carefully thought about, worked out. The real value, I would say, is how these tools work together. An NPO may identify an account or onward transfer. A Section 1782 may explain the route between institutions. Disclosure elsewhere may then identify who controlled the destination account. So individually, those pieces may not tell you much, but bring those together and they can be super useful. In terms of how you make the application, you can make it without notice.

You may want to. That's not easy for the court to grant that. But where notification might tip off the target or frustrate the exercise, then, the court is more likely to be favorable to your request for seal and gag in those circumstances. Again careful evidence, full and frank disclosure, proportionate approach, etc., all need to be carried out. And then once an asset is found, you move to preservation. I'm not gonna speak too much to that in terms of enforcement because Andrew's going to speak to that a little bit but freezing, of course, isn't recovery. The final enforcement route has to be designed around the asset, its ownership, and the jurisdiction in which it sits. So that's my view on that question.

Quentin Pak:
Thank you, Tim. Andrew, what do you think, particularly in terms of discovery and judgment enforcement, what are the tools that you typically use?

Andrew Willins KC:
Tim has dealt with, most of the tools that we would see here, as has Fergal. I think I would just add two points before I deal with enforcement. The first is that one of the officeholder's powers is obviously to request information from directors and to examine individuals. And that may well be an instance where the officeholder will want to seek recognition because the director of a BVI company is seldom in the BVI. They may be in Singapore, they may be in China, Hong Kong or elsewhere., and so it will in those circumstances often be necessary to go to the local courts, get the order recognized. And there are many instances where this has been done very successfully, can also be quite slow. You can meet, errant directors that aren't particularly forthcoming with the information, but there are also cases where the courts have locked people up for failing to attend the examination orders.

So that's obviously a powerful discovery tool. The other, Tim has touched on Norwich Pharmacal applications. As I think, you will know and most people will know, in England, those tend to be treated as a measure of last resort. That's what the authorities say, but in the BVI, they tend to be a measure of first, and I would go so far as to say the only resort because we don't have a pre-action disclosure regime. And so where you're dealing with the shares in companies as generally you are, there is a need where the registers are not public, to obtain from the registered agent details of who the shareholders. And as I think Fergal said earlier, the shareholders aren't always the true owners, so the beneficial owners as well and who those are, where they are and so forth.

So the Norwich Pharmacal tool in the BVI is extremely powerful. The BVI courts have taken a much broader view of the jurisdiction than the English courts, to the extent that they have pointedly refused to follow some English authority. And more than that, the legislature has actually gone so far as to effectively overrule some English authority in so far as it says that if a letter of request is available, you should use that approach instead. So Norwich Pharmacals, as I say, tend to be a measure of first resort, not for an office holder because they've got their own powers, but for a creditor in working out who the shareholders are, and therefore whether there are assets in the jurisdiction that can effectively be frozen. And then your question, Quentin, was once the assets have been frozen, once you've got the judgment, what does the enforcement process look like?

And obviously, that depends on who the defendant is. I said earlier that you very rarely have local individual BVI defendants or assets. You're dealing with companies. And so you're looking really at two different categories. In the first category, you've got maybe an LCIA award in London against a particular company, a BVI company. Then you're looking to enforce against the company and its assets. The alternative is you've got a award or a judgment against an individual or a company that owns shares in a BVI company. And what you're then looking to do is to protect the shares in the BVI company, ultimately enforce against those shares, and obviously then to try to realize the assets of the BVI company in due course. So in the first category, winding up is the most obvious tool that we would use.

If there is a debt that exceeds $2,000, which is the statutory minimum, and there is no genuine and substantial dispute, as often there cannot be, if there's a judgment or award, then the court will robustly wind up a company on the basis that it's insolvent. And that then unlocks the powers that Fergal has spoken about in terms of investigation, but it also unlocks the powers under the Insolvency Act, the power to unwind transactions and various other types of, for example, fraudulent trading claims, which are often not associated with limitation periods. So that is an extremely powerful tool. In the second category, where you're dealing with an individual, let's say in Hong Kong, who has shares in a BVI company, there are two routes to enforcement. One is with a charging order over those shares, and then an order for sale and/or the appointment of a receiver to affect the sale.

And the other is to appoint a receiver by way of equitable execution. Now, which should you choose is quite a difficult, fact-sensitive question. The authorities tend to say you should go for the charging order route and the order for sale where possible, but you're often not dealing with shares that are easily tradable. You're dealing with shares that are private company, they're not listed, and there may have been goings on that need to be looked at or unwound in the company itself in order to realize value. And so in those circumstances, a case we were involved in Industrial Bank and LIBIN, establishes that you don't need to take the charging order route, you can take the equitable execution route.

Quentin Pak:
Okay. Very interesting. At this point, maybe I'd just like to remind the audience that if you have any questions for any of the speakers, please post them in the Q&A box and we'll try to address them within the time that's available. In the last 10 minutes or so that we have, now up until this point, we've talked about the different components of the insolvency process. So we've talked about the things that we need to think about, what needs to be done, how to get funding to facilitate different parts of the process, assets preservation, discovery and so on. Now, putting it all together, I'm sure in practice, it's much harder. I mean, there are a lot of challenges that come up. So, I think in the last part of the discussion, maybe I'll go to Fergal, Tim and Andrew.

When you're faced with all the situations that we've talked about, so the jurisdictional dynamic, you have assets moving around, you have different stakeholders with competing interests and priorities, what are some of the more interesting sort of situations that you've come across, things that you've learned or things that you think are very important to think about when you look at very complex insolvency situations? So in other words, I mean, what are some of the war stories that you could share with us? Maybe we'll start with you, Fergal.

Fergal Power:
Yeah, interesting. I have had interesting times over in Asia, but as in anywhere else in the world. I think, you've got in such scenarios, you've got very much competing interests, objectives and structures that make things very, very difficult. So going back to the example of a Cayman incorporated Hong Kong ListCo that has operations in China, and one of the structures that we've seen in the past is a variable interest entity structure whereby groups that are held through a variable interest entity structure because the underlying assets are subject to restrictions regarding foreign investment. Managing to take control over those is one of the questions we get asked on a regular basis, how would you enforce against that? How do you get access to records? When, in truth, nobody's ever succeeded in actually enforcing against a VIE structure in China.

So balancing the position of your powers overseas and then also into Hong Kong, how do you gain leverage in a restructuring in China whereby you have a promoter that's under no obligation to actually cooperate with you, and how do you manage doing that? The challenge then also to your point, is around assets moving through the process as well, where may have applications going on, BVI, Cayman, Hong Kong, US as well. Striking that balance around and sequencing things in the right way is also becomes very, very challenging. And then the last part is and one of those examples I referred to was, well, what happens when the regulator in Hong Kong gets involved? The SFC, the exchange. Quite often, the SFC, you'll be investigating, you'll be subjected to secrecy with regard to investigations, and you'd be limited in what you can actually do.

Similarly, with the Hong Kong police, subject to freezing orders, and we've seen that with some regularity now in Hong Kong. The challenge, I think, and just resolving all of these for being the officeholder where you have competing advice in China, Hong Kong, the US, and offshore is just around rigorous project management on a case, having that one coordinated plan, single control point, clear ownership of workstreams across jurisdictions, that you have proper engagement with the various different parties, the creditors, and also other regulators and stakeholders, and being very, very clear on that. So that's a message there. I can get into the points just on China, shortly, but I'll hand over to Andrew and Tim.

Quentin Pak:
Andrew, what are your thoughts?

Andrew Willins KC:
Yes, it's a big question. I mean, we've discussed to date the movement of assets and the protection of assets. I thought it might be interesting just to touch on another problem which most people don't anticipate, which is the movement of companies.

Now, this might raise an eyebrow in England where I don't think this is possible, but in many of the offshore jurisdictions, and the BVI is one, it's possible to re-domicile a company into and out of the jurisdiction. Now, there are recent amendments to the Companies Act that in theory stop that happening after proceedings have been issued. But we had a situation a few years ago where we were tasked with enforcing an LCIA award, which had been issued obviously in London. The BVI company was the debtor, so it was in the first category that I was speaking about earlier, and we applied for a freezing injunction. We actually applied for a receivership order as well, but the judge at that stage took the view that we didn't have quite enough to show that they were so dodgy that they weren't going to comply with the freezing injunction.
And so it's the freezing injunction we got. So, I may get the date slightly wrong, but I think we served that on the Monday, and we had a return date the following week. It was a short return date, and our enterprising friends at the respondent decided that obviously a receivership application, a renewed application was on the cards, and so they re-domiciled the company faster than I've ever seen happen in the 20-odd years that I've been here to Anguila. And so then you had, ultimately, a situation where we went to the judge and said, "Well, look how dodgy they are. I mean, you weren't satisfied last time, but look what they've just done." And he cheerfully granted a receivership order. But in the meantime, they took steps to appoint an officeholder in Anguila. And you then set up this battle where you had two different officeholders with two different objectives doing two different things where the assets were located.

Now, I think we were lucky in that case because, they moved to Anguila, which was another OECS jurisdiction. And so we applied for receivers there, and then we applied to the Chief Justice, and she moved the proceedings from Anguilla back to the BVI. And so we had the two receivership orders effectively case managed together by the same judge. But imagine if they'd gone off to another jurisdiction, where that wasn't possible. So the lesson, I think, is every single standard freezing injunction that I obtain now has a provision in it, which has been upheld by the Court of Appeal in that case that says not only must you not dispose of your assets, but you must not dispose of yourself either. You may not move to another jurisdiction.

Quentin Pak:
Interesting. And what about you, Tim? Have you come across anything more eyebrow raising than companies moving themselves?

Tim Symes:
Well, actually, I have had that very situation where we had two companies, well, the one company moved to another, and they were both dissolved. We had to scratch our heads like, "Well, do we need to resurrect both of them or is one even more dead than dissolved?" I think we ended up looking to bring back to life both of them on the basis of asset and document tracing. So, but my example, I fear I might have sort of anonymized it and sort of vagued it so much that I, hopefully, it's of some interest, but I'll be brief.

And the juicy bits, I can't really disclose at the moment, but I'd love to, because they're the interesting bits. So anyway, we were targeting a debtor who had been a recalcitrant, vexatious litigant for years and racked up a load of debt on that basis. So we had to go across multiple jurisdictions, met offshore, mainland, numerous financial intermediaries, a long history of value apparently moving between them. We didn't begin with an identifiable current bank account property or property or asset. We just had fragments, historical financial records, judgments, bits and pieces that we had to compile and sort of try and make into a jigsaw puzzle that actually sort of showed any kind of coherent picture. But I suppose the lesson from that was the cumulative effect of all these jigsaw pieces, which we've painstakingly gathered through various, you know, NPO 1782 and all that kind of thing, are providing our really powerful picture.

And so the lesson I've taken from that is patience, perseverance, keep chipping away. And actually, the picture will hopefully start to emerge.

Quentin Pak:
Yeah, very interesting, Tim. So hopefully, in time, you'd be able to unanonymize some of the details. Great. Now, that, that's a very, interesting discussion. We still have a couple of minutes left, so maybe we'll wrap by asking each of the speakers to just briefly comment on whether they're seeing any trends that you feel are forthcoming that would transform the way cross-border recoveries are investigated, funded, and pursued generally. So maybe Fergal, would you like to start first?

Fergal Power:
Yeah, sure. So firstly, dare I say it, is AI or super intelligence. Not quite sure, but certainly with the advent of newer technologies, that is allowing us to front load and accelerate investigations and have a better understanding of where assets move to have globally, or have at least certainly a suspicion of where assets are. And increasingly, we are using tooling and capabilities that allows us to formulate a strategy even before an appointment. So having a much better understanding that where and ultimately what is the end game in an administration. The other part I just think about is around having more skin in the game, insolvency practitioners having skin in the game and not just being able to charge their hourly rates, but potentially allowing the courts moving beyond. And if an administrator is looking or willing to put skin in the game, how are they remunerated accordingly and around that?
And that also may help in sharing some of the burden and aligning interest in a case.

Quentin Pak:
Right. Tim?

Tim Symes:
Well, Fergal's nicked AI.

Fergal Power:
Super AI.

Tim Symes:
Super AI, but I agree with everything you said on that. Two other points, I suppose, funders who want a seat at the table for the full scale litigation are gonna need to get involved earlier. So I think those funders that are proactive and entrepreneurial in that, they will be getting the big mandates. So I can see that being a reason for funders generally starting to compete more and more in the initial stages of large mandates. And then I suppose the third point, perhaps glib is, you know, the winners as in of the cases, are going to be those who can join the dots across the jurisdictions. And turn the massive information into something that's coherent and then turns into recovery and I guess that takes us back to AI assisting with that.

Quentin Pak:
Thank you, Tim. We'll just hold that thought on funding for Joe to comment on. But Andrew, what are your thoughts on trends?

Andrew Willins KC:
Both of my colleagues have nicked examples I was going to give, but I think one other and one we see particularly in the BVI is in relation to digital assets. That's obviously a massive growth area and it remains to be seen, I think, how successful the enforcement strategy will be. We know that you can get personal known injunctions. It's when you get to the enforcement stage that there's a little less clarity, I think. So we'll see how that develops.

Quentin Pak:
Great. Thank you. And Joe, we'll give you the last word.

Joe Durkin:
Yeah. I mean, just tying all of that together, the advancement of AI even the last six to 12 months, you can see the strengths of what the databases provide you with. We've seen new players come into the market as well, and it's quite extraordinary what they can do and what they can help us essentially take a view on from an underwriting perspective. And to Tim's point about funders coming in earlier, that's a valid point. You need somebody to fund quite often the discovery aspect. We've talked about Norwich Pharmacals and 1782s, and to get to that particular point, the investment may be a few hundred thousand dollars. You may not have sight on the tens or hundreds of millions that you're going after, but somebody has to pay for that. And it's really those who will come in at an earlier stage that will stay on ultimately vital do so.

So I think it's just tying those together. There's definitely an awful lot of movement. And you can see that from the likes of Solomonic. You can see the activity that is going on in the UK courts, and a lot of those matters are being funded. And the activity has certainly increased in the last 24 months to what it was beforehand.

Quentin Pak:
Great. Thank you, Joe. We have now gone past our allocated time and I don't see any questions in the Q&A box. So then that just leaves me to thank our speakers for a very interesting and insightful discussion today. So thank you, Fergal, Tim, Andrew, and Joe. And thank you to all of you for joining the webcast today.