Lloyd's broking company fails

Lloyd’s of London broker James Hunt Dix has collapsed following a probe into its financial affairs by Big Six firm Price Waterhouse.

The troubled broking company had fought a long-running battle with the insurance market’s regulator during which it fended off claims it was trading while insolvent.

The battle reached a climax last month, when insurance specialists from PW were sent in by the regulator to determine the company’s financial status.

PW had been asked in particular to check on the position of a claim by James Hunt Dix against its ‘errors and omissions’ insurers, which the broker believed owed the company money and would establish its financial health.

The PW probe followed a court hearing that allowed the broker to continue trading in the Lloyd’s market and make payments from its insurance broking accounts. It also forced Lloyd’s to shelve plans to call in the receiver.

The court’s decision overturned an earlier ruling that James Hunt Dix should cease trading from 19 February.

But on 31 March, the court battle was rendered academic when the company was advised by Kidsons Impey that it had run out of cash and could not meet bills to cover its running costs.

It brought in liquidators Patrick Wadsted and Tony Houghton last week from Kidsons, which said it would begin ‘to gather up the assets, agree the claims and hopefully pay the creditors a dividend’.

Wadsted said he could not comment on the PW report.

‘It is a matter between PW and the regulator,’ he said. But he added he would also be pursuing the claim against the broker’s insurers to recover funds for the creditors.