Griffins appointed as Liquidator of Total Debt Relief Limited

On 31 October 2018, the Financial Conduct Authority (FCA) successfully petitioned the High Court for Total Debt Relief Limited (TDR) to be wound-up in the public interest.  There was no challenge to the petition by the sole director of TDR nor by its Company Secretary who was also the sole shareholder. The FCA has subsequently launched an investigation into the activities of the firm.

TDR was a debt management company which operated a full and final settlement model, holding funds on behalf of its clients who were having trouble meeting their debts. The model typically saw the client make regular payments to TDR which, in turn, made a minimum or nominal payment to the creditor. The remaining balance of the payments from the client was held by TDR to create an accumulated fund over time which was then used to settle the debt with the creditor for a reduced amount.

Stephen Hunt, a partner of Griffins, was appointed as liquidator of TDR by the Secretary of State on 7 November 2018.  He was previously appointed provisional liquidator of TDR by the High Court when the FCA made an urgent application to the Court on 11 September 2018.

Prior to Mr Hunt’s appointment as provisional liquidator, the FCA had already taken a number of urgent steps to investigate what had become of the client monies of TDR and to secure it to prevent further dissipation.  Building on that work, on appointment Mr Hunt took legal action to freeze bank accounts in the UK and USA to secure and preserve TDR’s assets for the benefit of its creditors and clients.  Upon his appointment as Liquidator that action continues and is now focussed overseas where the majority of TDR funds were moved before 11 September 2018.

Through his investigations the Liquidator has now identified that monies belonging to a client base of over 450 clients amounting to about £1,500,000 was required to be held in a separate client accounts.  These investigations suggest that these funds had been taken from the accounts over several months and appears to have been paid to entities controlled by TDR’s remaining officers in the USA.  At the end of August 2018 these individuals attended the offices of TDR in the UK and dismissed all the staff.  The only UK based director had resigned earlier in August contributing to the concerns of the FCA that TDR did not have a UK resident director.  All of the bank accounts were then effectively emptied and the balances eventually remitted to accounts in the USA.  The assets of these individuals are now the subject of worldwide freezing orders.  They have to date failed to provide company records that would facilitate the reconciliation of the client funds against the bank accounts and the money misappropriated as above.

The objective of the Liquidator is to recover the maximum available money that was being held for TDR clients and to return that money to TDR clients.

TDR clients should note that the successful completion of any legal action cannot be guaranteed.  Nor is it possible at the current time to advise when that action may be finalised and the available funds returned to the control of the Liquidator.  It is also impossible to say at this time how much money will be returned to TDR clients or distributed to creditors but the Liquidator and his team has worked hard, and will continue to do so, to ensure the best possible outcome for those affected.  The costs of this work may impact the amount that could become available to be returned to creditors.

The FCA has previously encouraged clients who have set up a direct debit with TDR, or who pay TDR by standing order to contact their banks to cancel the arrangements.

Enquiries

TDR clients who have already provided the required information should avoid contacting Griffins.  Whilst we have endeavoured to answer individual enquiries to date TDR clients in particular should note that questions directed to the Liquidator or his staff increases the costs of the liquidation and will cause delays to progressing the recovery of TDR client funds.

The Liquidator is required to issue an Annual Report that is published on Companies’ House. If the legal action referred to above is not complete by 6 November 2019 and TDR creditors and clients have not been contacted in the interim, a copy of that report will be available at https://beta.companieshouse.gov.uk

How to Claim                                                                        

The Liquidator is already holding a substantial amount of information from TDR clients about their accounts and will continue to gather as much information as possible from creditors and former clients of the firm about payments made to, or owed by, the firm.  The Liquidator has also recovered information from third parties that will assist in reconciling client accounts.

Whilst we cannot deal with individual questions from clients and creditors at this time, we ask that anyone who believes that they are owed money by the firm should contact TotalDebtRelief@griffins.net with the following information as soon as possible if they have not already done so):

  • client reference number
  • copy of the signed agreement initially entered into with TDR
  • full name
  • address and contact details
  • brief summary of claim
  • copies of any documents (such as an agreement entered into with TDR) that will support your claim

What not to do

Do not call us. We are not able to advise TDR’s former clients on their outstanding debt arrangements i.e. the money that they still owe to others. Therefore, we would urge all former TDR clients to follow the advice set out in the FCA statement and contact the Money Advice Service (online at www.moneyadviceservice.org.uk/debt-management or by phone on 0800 138 7777)