Insolvency And Law Scam Collapsing – Part Three
This is the third article on the Insolvency And Law Scam perpetrated on loan note investors. If you have not read Part One, or you would like to refresh your memory, THIS LINK WILL TAKE YOU TO INSOLVENCY AND LAW SCAM – PART ONE. Please then read Part Two before reading his article. THIS LINK WILL TAKE YOU TO INSOLVENCY AND LAW SCAM – PART TWO.
LATEST DEVELOPMENTS ON HIGH STREET GROUP
Our interest in High Street Group started in June 2020. If you are interested in the history here are links to our articles on HSG. If you are not interested in the history move on to the next paragraph.
High Street GRP article June 2020;
High Street GRP article November 2020;
High Street GRP article May 2021;
High Street GRP article November 8th 2021;
High Street GRP article November 15th 2021;
High Sreet GRP’s Murky Swamp – March 23rd 2022;
High Street GRP’s Swamp Gets Murkier – March 24th 2022;
Recovery Room Scammers Focus On HSG Investors – March 2024.
We have seen the email sent out to High Street Group investors by Insolvency And Law Ltd. In it they are trying to persuade investors to support an effort to transfer the liquidation of High Street GRP Ltd away from the Official Receiver to an insolvency practitioner of I&L’s preference. In the absence of any other recovery options we understand why investors would welcome any proposal which offers them any chance at recovery no matter how slim, but those investors who paid Insolvency And Law should realise that this is just an attempt to kick the can down the road to stall them from asking for their money back.
I&L can’t take any action on any Assignor’s behalf because the Deed Of Assignment is not lawful. I&L cannot lawfully present itself to the Official Receiver as having any valid assignments. The assignments were obtained under false pretences. Therefore, I&L cannot present itself to the OR as a creditor of High Street GRP Ltd. It has been informed it has no rights to claim any debts or to take any legal actions.
The situation with HSG is that the company has no assets. Its director, Gary Forrest, has been made bankrupt. The Security Trustee, Castle Trust And Management Services Ltd, is in liquidation (bankrupt) and its owner, Steven Knight, has also been made bankrupt. The Serious Fraud Office has investigated and has not yet brought any charges against any party. The Official Receiver will no doubt be liaising with the SFO, so if there is a chance that a prosecution will be brought the OR may well decide not to allow a private IP firm to take over.
As the Administrators were appointed by High Street GRP Ltd under very dubious circumstances (see our historical articles above) and with what appeared to be an obvious conflict of interest, our view at the time and since is that they should have declined to take the appointment. However, they didn’t and that gives investors an opportunity to challenge the administration and the actions of the Joint Administrators which may lead to potential claims against them. It’s a tough hill for investors to climb, but not impossible.
If the assets had been transferred to third parties under-value or under circumstances which ought to have been challenged but were not, the Joint Administrators could be held liable to compensate creditors. If that is the aim of having the case transferred to a private IP firm then it may be a worthwhile move. We have been advised that the firm of Griffins has been suggested. That would be a good choice because they are recognised as an honest and diligent firm. If appointed we have confidence they would look closely at Insolvency And Law’s assignments.
However, even if a private IP firm is not appointed there are ways investors can work in partnership with the Official Receiver to run recovery actions against parties that the investors themselves are not able to run. For example, against the HSG accountants, auditors, solicitors and banks. Those are all claims the OR could make on behalf of HSG because HSG had the contractual business relationships with those parties. The OR can also investigate the actions of the original Joint Administrators if enough pressure is brought to bear. A private IP firm can also run those actions if the case is transferred, but the costs charged are likely to be higher than what the OR would charge. Nobody knows if there is enough evidence to make any viable claim because nobody outside of the original Joint Administrators and the OR has had access to the files.
If we were an investor we would approach the OR first to see if a deal can be done. Investors do not need to reach any investment value threshold to be able to do a deal. The OR should be amenable to an approach and should be willing to share information so that investors can make a decision on whether there are any viable claims. The only thing that might restrict the OR is if there is an ongoing Police investigation in which case the OR may not be able to provide information.
THE REASON WHY INVESTORS CAN CLAIM REFUNDS FROM INSOLVENCY AND LAW
In our article INSOLVENCY AND LAW SCAM COLLAPSING – PART TWO we described Alex’s legal action against the company. In Alex’s submission to the court he touched on the illegality of the Deeds Of Assignment. Robert Dene Smith addressed this in his submission to the court citing the following cases:
Don King Productions Inc -v- Warren [2000] Ch 291; and
Linden Gardens Trust Ltd -v- Lenesta Sludge Disposals Ltd [1994] 1 AC 85.
He didn’t bother with proper legal advice. Insolvency And Law just uses ChatGPT to produce its legal arguments. I&L has quoted these same cases to other investors who have asked for refunds to make it appear they are knowledgeable on the law, but they are not and neither, it would appear, is ChatGPT. Any piece of AI software is only as good as the information you give it.
Originally, back in May 2025, Insolvency And Law was writing to 79th Group investors citing different cases in support of their argument. Here is an excerpt from their email:
Relevant Case Law:
- Chudley v Clydesdale Bank Plc [2019] EWCA Civ 344.
- Brice v Bannister (1878) 3 QBD 569.
The problem was that they didn’t support I&L’s position at all and one of the cases was almost 150 years old!
They’ve now stopped using those cases and have switched their arguments to the Don King and Linden Gardens cases which also don’t support their arguments. No doubt they will now ask their AI program to pluck yet more cases out of the air instead of taking sound legal advice from a KC.
The most important of all cases is Linden Gardens because it went all the way to the House Of Lords and is regarded as the definitive and over-arching judgement on the subject. It is supported by judgements given later in many similar cases.
Kroll Advisory and Quantuma, joint administrators of many of the 79th Group companies, sought Kings Counsel advice on the Deeds Of Assignment. Counsel considered the cases put forward by Insolvency And Law and other cases before determining that the I&L arguments were fatally flawed because they did not address or make a viable argument against the over-arching judgement made in Linden Gardens. I&L was advised that the assignments were unlawful and unenforceable.
Based on that notification the HSG, 79th Group and Godwin assignments cannot be recognised in any insolvency proceedings OR in claims against third parties.
Linden Gardens Trust Ltd -v- Lenesta Sludge Disposals Ltd [1994] 1 AC 85.
The House of Lords decision established that, “under English law, a purported assignment in breach of a contractual restriction on assignment was ineffective to transfer the contractual rights, even as between the parties to the assignment” [in other words, an assignment document obtained without the written consent of HSG, 79th Group or Godwin, had no legal standing and could not be relied upon].
THIS LINK takes you to a simple explanation of what was a complicated case. You will note that the summary makes the position clear:
- HL [House Of Lords] held that for legal and policy reasons, the contractual prohibition on assignment was valid, therefore the assignment was invalid, and therefore Plaintiff had no ability to claim damages from Defendant. Our clarification – In relation to loan note investments, if there is a contractual prohibition on assignment in the loan note contract (which there is in HSG, Godwin and 79th Group), then it is valid. As a result this makes any assignment invalid. It really is as simple as that.
Lord Browne-Wilkinson briefly explained why the policy for recognising clauses prohibiting assignment should be allowed as valid:
- There is a policy argument for allowing such clauses to be effective: some people might prefer only to deal with a particular party and might want to avoid a relationship with a party that they find unreasonable to work with etc.
In First Abu Dhabi Bank v BP Oil International Ltd [2018] EWCA Civ 14, the Court of Appeal followed the precedent set by the decision in Linden Gardens and held “that a restriction on transfer would prohibit any legal or equitable assignment without the consent of the counterparty” [i.e HSG, 79th Group or Godwin]. The Court found that “any assignment in breach of such contractual restrictions would be of no effect” [in other words, it agreed with the judgement in Linden Gardens].
There are several cases which followed where the Judges came to the same conclusion. If anyone wants to know the other cases they can contact us and we’ll happily provide them.
79th GROUP INVESTORS
In our previous article we published excerpts from Insolvency And Law’s email to Alex and other investors. Alex was an investor in 79th Luxury Living Five Ltd. What we omitted to say was that when Alex was sent the email informing him that “You currently stand to recover up to 70% of your Loan Note’s value, which is a significantly more favourable outcome compared to 0% which is the likely result if no action is taken”, a winding up petition had already been filed against 79LL5 so it was another bare-faced lie for I&L to state that “You currently stand to recover up to 70% of your loan note’s value….”. No investor can recover any money when there is a winding up petition in place.
We also wrote to a large number of investors in 79th Luxury Living Six Ltd and 79th Commercial Three Ltd to inform them that Insolvency And Law was attempting to persuade them to sign Deeds Of Assignment and pay the 6% upfront fees when winding up petitions had already been filed against those companies too. What makes this reprehensible and shows how utterly dishonest the people in Insolvency And Law really are, it was Insolvency And Law that filed those winding up petitions!
They were deceiving investors into believing they could recover money for them from 79LL6 and 79CM3 when they knew that their own winding up petitions were already in place.
When someone files a winding up petition (the petitioner), any investor who wants to register a debt simply has to notify the petitioner that they want to join the queue for payment. It is free to do that and it is a legal requirement that the petitioner informs the court of every person who has come forward. Instead of doing this, Insolvency And Law kept quiet about being the petitioner and encouraged investors to sign Deeds Of Assignment and pay upfront fees for nothing. It was clear that the companies would not be able to pay any investor because the Police would not allow it. I&L made a lot of money from those investors.
There’s also another reason why the email sent out to 79th Group investors was a clear attempt to defraud those investors. A former employee of 79th Group informed us that Insolvency And Law had been trying for years to get money from 79th Group without success. We were told that the Websters instructed lawyers to deal with them. If I&L could not recover money when 79th Group was attracting millions of pounds from investors, then it was fully aware there was absolutely no chance of recovering money (let alone a net 70% of their loan note’s value) after the Police had raided the offices and all new investment had understandably stopped. I&L was deliberately misleading investors and obtaining money by deception.
WHAT’S NEXT FOR INSOLVENCY AND LAW LTD?
Well, they’ll refuse to pay refunds to investors that’s for certain. They never pay refunds without legal action. They have no choice but to challenge Kroll and Quantuma’s refusal to recognise them as creditors because they’ve been given clear legal reasons explaining why their assignments are unlawful. Because of this they cannot take on any more clients where the investment contracts contain a restriction on transfer because to do so would be a criminal act, and they know they should refund the investors who they duped into paying upfront fees. They’ve been told the Deed Of Assignment is unenforceable and the only way they can get around that is to take Kroll and Quantuma to court and challenge their decisions, or at least make a show of taking them to court with the hope that by forcing them to incur costs they will rescind their decision.
As it stands today, we recommend that HSG, Godwin and 79th Group investors who entered into a Deed Of Assignment with Insolvency And Law should consider issuing it with a legal warning similar to that issued by Alex in our previous article in order to protect themselves. His warning to Robert Dene Smith on the grounds that the assignments are unlawful and unenforceable is repeated below:
You, your colleagues and Insolvency & Law Ltd must not under any circumstances make representations and/or claims relating to my loan notes and/or the debt attached. If any of you attempt to make any representations or claims as alleged assignee of my loan notes and/or debt you would be acting without my authority and committing a criminal act which I will report to the authorities.
We also recommend investors send a copy of the warning to the appointed administrators / liquidators of their respective investment companies.
It is in every investor’s best interest to be recognised as the true creditors of their respective investment companies and not Insolvency And Law Ltd. I&L is not entitled to any money recovered through insolvency, the Proceeds Of Crime Act or third party legal actions.
The sad thing is that if investors had paid their upfront fees to a solicitor they would have had sound legal advice on potential claims and, in the case of HSG and LL6 investors, would have had a substantial pot of money with which to support a private IP firm to pursue wrongdoers when a viable claim was identified. Investors would have saved themselves a lot of money which has been paid to a scam company offering services it knew it couldn’t and never intended to deliver.
Insolvency And Law Scam – Part Three
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