Given all of the economic and geopolitical uncertainties at play, industry leaders and analysts are expecting insolvencies to continue to rise, which will create opportunities for funders focused on the space. This has been reflected in an update from one of the UK’s leading funders of insolvency litigation, which has announced record new case investments, case completions and cash recoveries in the current financial year to date (FY23 YTD).
An LFJ Conversation with Jonathan Stroud
Given all of the economic and geopolitical uncertainties at play, industry leaders and analysts are expecting insolvencies to continue to rise, which will create opportunities for funders focused on the space. This has been reflected in an update from one of the UK’s leading funders of insolvency litigation, which has announced record new case investments, case completions and cash recoveries in the current financial year to date (FY23 YTD).
In a trading update to the London Stock Exchange, Manolete Partners has announced that it has made 246 new case investments for FY23 YTD, an increase of 55% compared to 159 new investments for the entirety of FY22. In parallel, Manolete stated that in this time period, it had also completed a record 168 cases, along with a record cash recovery from already completed cases of £26.2 million. According to the company, this has led to a consecutive five month run of profitability through the end of February 2023, with Manolete expecting a strong recovery of profitability in FY24.
As LFJ had previously reported, Manolete has been engaged with Barclays on a pilot programme to recover misappropriated funds from the government’s Bounce Back Loan Schemes. In the trading update, Manolete revealed that 119 companies have been included in the pilot scheme, with 45 cases assigned to Manolete. Of these cases, Manolete claims that three have already been settled and a further seven have settlement offers, with only one of these cases not having offered or agreed to repay the full amount of misappropriated loans.
Manolete’s CEO, Steven Cooklin, stated that ‘the UK is now experiencing record high levels of insolvencies and that is directly leading to the Company’s impressive operating performance’. However, the trading update did also reveal that the Court of Appeal had dismissed Manolete’s appeal to a High Court judgement from last year, and that £750k in costs relating to the case ‘will now be written off in H2 FY23 and a line drawn under the matter.’
