Tenon employee faces court
An insolvency practitioner now with AIM-listed Tenon, and the firm acquired by the consolidator, are being sued for £2.2m over the sale of a company's assets.
Carl Jackson, and his former firm BKL Weeks Green, are being sued over his role as administrator of building contractor George Kemp Stroud and Company in 1998 when he is alleged to have ‘breached’ his duty of care.
A writ, lodged at the High Court by lawyers for the contractor, alleges, among other things, that Jackson was ‘a wholly unsuitable person’ to act in the case because of his ‘potential conflicts of interests’. The writ claims Jackson faced a conflict because his firm was auditor of Leonard Field Group, which bought most of the assets of George Kemp Stroud.
According to the writ, Jackson ‘failed’ to advise the company’s board that it ‘should in any event seek independent advice as to its options’ and that ‘in light of the potential conflict of interest’, he was ‘not in a position to provide such independent advice’.
The writ also alleges that Jackson ‘lost the opportunity to have an independent insolvency practitioner attempt to broker a sale’ to two third parties which would have avoided administration.
The case is being brought by Vivian Bairstow of Begbies Traynor who became joint liquidator of George Kemp Stroud in April 1999 after GKS’s administration order was removed. He told Accountancy Age: ‘The business could have been saved. People were wanting to buy the business as a going concern.’
George Kemp went into administration in 1998, after a review suggested by the company’s bankers, Lloyds. BKL concluded the building contractor was insolvent and ‘invited’ its directors to meet Jackson.
Tenon chairman Ian Buckley declined to comment on the writ. A company spokesman said Jackson had been advised not to comment.