Prognosis for trading with criminally acquired assets


So you buy a business and then find that the entire structure and assets of company are subject to a police investigation, where it is alleged that the assets were criminal acquired. That’s a serious problem, but one which will take several years to manifest. Let’s call that Problem A.

Problem B is that you have also established that the business needs to raise cash. This is an acute problem which will manifest in a matter of months.

What’s the prognosis?

It could be 2018 before a verdict on Problem A, the criminal trial, is reached. If it’s not guilty, there are no consequences. If it’s guilty, the rightful owners of the criminally acquired assets can apply to the court to recover them. This doesn’t mean they will apply, but if they do, it’s highly likely that the court will make the award in favour of the rightful owners.

For our example, the rightful owners are creditors of a failed business, represented by a liquidator. It’s the liquidators job to get as much money for the creditors as possible, and in this instance, HMRC is the creditor with overwhelming influence.

There’s an added complexity. Although none of your directors are contaminated by the criminal investigation, there’s a concern that some of the accused are beneficiaries of shares in the company, or commercial contracts which the company has entered into. In short, the accused have left the stage, but they could still have a considerable financial interest in the success of the business, which may steel the resolve of the most influential creditor, HMRC. HMRC know such tactics well and would be reluctant to allow a convicted criminal to profit from their enterprises.

As far as Problem A is concerned, you have to allow the law to take its course and hope for a not guilty verdict. Should a guilty verdict transpire, you then have to hope to cut a deal with the liquidator (representing HMRC et al) to allow you to continue to retain title to the assets.

If the creditor was malleable, willing to come and go with you, this would be possible. Especially as the liquidator may have the opportunity of pursuing the professional indemnity (PI) insurance of some of the accused, who provided professional services relating to the transaction. Grab the PI money for the creditors and allow you, your shareholders, and the beneficiaries of your commercial contracts, to continue to benefit from ownership of the assets.

A great deal of uncertainty surrounds this, however. You would make it your business to get as close as possible to the liquidator. Make sure there’s no limit to the hospitality on offer, but ultimately, HMRC will decide how matters proceed. It may even be the case that PI money is pursued, and the assets are recovered and put on the market. There will, after all, be an eye-watering level of professional fees to cover.

Problem B is, as I said, more acute. Raising money for a business which is losing money and burning cash is difficult enough, but if there is a possibility the business has been built upon criminally acquired assets, the challenge is herculean.

The criminal trial may not conclude until 2018 (or later), and it could take a couple of years thereafter for the liquidator to petition the court for the assets and then dispose of them. In short, the assets could come back onto the market around 2020.

Problem B is for you to fund a trading deficit until 2018, then hibernate for a couple of years, and bid enough to buy the assets at auction in 2020.

In the short term all you can do is try to convince as many people as possible to become co-investors. Or put the money in yourself, of course (sorry, I know how you feel about that prospect). Then you could shower the liquidator with the kind of corporate hospitality illustrated in The Wolf of Wall St, and hope you’ve got enough credit with them to have them batting for you at the creditors’ meeting.

The prognosis? It’s not the fact that you are possibly trading with criminally acquired assets, or that your entire enterprise could be shut down with the drop of a sheriff’s gavel, that would worry me. There’s nothing you can do about that, so ignore it. The big worry is how raise the £25m to keep the lights on until you discover if you’re business’s founding fathers acted within the law.

Good luck with that.

This is an absolute minefield. No one is in control. Three years ago I suggested the best thing to do was to start from scratch at another location, this is the only way to proceed with certainty.

Share premises in Paisley, or Cowdenbeath or wherever will take you. Hope that you can carry some brand affinity (although clearly you’ll not be able to use any disputed IP, including brand names). Appoint reputable people to your board and get back to doing what you really want to do.

Behold to no one contaminated by the decades of misrule. Cut loose those who hold the onerous contracts. Allow the assets to come back onto the market in due course, knowing that by then you have all the customer goodwill you need to ensure there is no point in anyone bidding against you at auction.

The future will be nothing like the past, but at least you’ll have a future.

Celtic are the first UK club to react to the refugee crisis

“This is absolutely the right thing for us to do. Our club was formed by immigrants, many of whom had escaped the devastation of the great famine.” Tony Hamilton, Celtic FC Foundation CEO.

Proceeds from Sunday’s Jock Stein 30th Anniversary game will go to alleviating suffering of the refugees. The club will appoint a charity with expertise to ensure the assistance is productive.

I know we go on about the Foundation a lot, but it’s the most important part of our club, today and every day.  Never let this change.

Click Here for Comments >

About Author

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4
  6. 5
  7. 6
  8. 7
  9. 8
  10. ...
  11. 43







    Ah ! Come Rock With Me .A mighty fine sampler from Treasure Isle .Issued the year I left school ..



    Sannic Sounds was issued in 74.A very limited issue..Never got it.Could never afford it when it came up for auction .It was bootlegged .I bought.the bootleg but the sound is crappy.Ordered the repress today – can’t wait !




    Cheers dude. Come Rock…has a number of great tunes – Phyllis Dillon, Paragons etc. It’s great that some of these are being re-issued. I’m wondering if there are some others out there. Barrington Levy’s Life Style – I’d like that. In fact, I’d consider either crowd-funding or paying for a project to do so!

  2. I’ve only been watching second half and I was wondering why we wanted to sign Fletcher.




    Is Scotland so short of right backs that Alan Hutton gets capped regularly?

  3. Careful With That Tax, Moonbeams on

    Think I’ll trade in my I Watch for a Mickey Mouse one ..



    That was a shocker!

  4. embramike says "the Huns are Deid" on

    What was all that about Scotland? Got exactly what they deserved tonight – nothing.



    They made the team ranked 49 out of 53 in Europe look good. Far, far too much space given, too many back passes, short passes to nowhere and hopeful punts up the middle. And such poor defending at their goal …



    With what was at stake, you would have thought second gear was an option. A good few should hang their heads, with a special mention for James Morrison – what exactly did he contribute.



    Oh well, at least France 2016 is on the telly ….

  5. sixtaeseven - Gardez la Foi on

    Desperate performance in the heat of Georgia.



    Did we even have a shot on target?



    It will be a hard hard shift against the Germans on Monday.


    I fancy the Griffs to score though…

  6. Whatever Steven Fletcher gets paid to play football is daylight robbery the guy is utter mince so he is!

  7. Quite clearly, the 4th “worst” team in Europe was technically and tactically, far superior to a “team” of Scottish journeymen. Looks like most of the “home nations” will qualify, apart from a poor Scottish team. Another nail in the SFA coffin.

  8. Always thought this match could be a banana skin for Scotland. It opens the door a wee bit for Ireland in the race for 3rd place. Taking it that both sides should beat Gibraltar if Ireland beat Georgia on Monday night they will effectively have a point advantage, with both having games against Poland & Germany. Realistically Ireland are very poor and have no business going to the Finals having said that I would take qualification in a heartbeat.i

  9. Right bhoys n ghirls its that time again CQN badges and now CQN cuff links!!!



    Please have a look at the following link, myself DOC and CRC have designed the badges n cufflinks (tho my design is obviously bestest :p) anyway have a look and if you like what you see email with design you like and how many etc to register your interest until manufacture and sale :-)



    1st two designs are badges and 3rd is cufflinks





    Badges will be £5 and cufflinks £8 (plus postage)



    p.s help me beat DOC n CRC to the prestigious honour of TOP CQN BADGE designer\seller hahaha (mines is shamrock design badge ;-) )





    Bundoran Bhoy

  10. It makes booking Florida during the tournament next year less painful now. ….Mickey Mouse, here I come :)

  11. TBJ says Wee Oscar Knox is in heaven with the angels on

    Just posted on fb that george A reminded me of Malm O



    Logged into cqn to see im not alone

  12. I should be annoyed the SFA works team were beaten,but years of indifference fuelled by Non Celtic player selection,when the Country had great players, is not easy to forget.



    Some poor players in that team.

  13. Careful With That Tax, Moonbeams on

    Tonight Scotland had a team full of non great Celtic players ..



    Didn’t matter a jot ..



    Were still shoite!





    Ireland will beat Georgia ..



    Scotland will beat Germany too ..



    They will .. Aye, I’m delud .. Convinced!!




    Barrington Levy – Life Style. LP



    Going rate for that LP is @ £ 75..Memory says on the GG’s label.Shouldn’t be too hard to find it. CD is much easier to find and much cheaper.Happy hunting !

  15. Jeez



    that was a cringefest! WGS at his stubborn best. Fletcher doing SFA and Griffiths kicking his heels on the bench. Maloney taking 6 poor outswinging corners when Mulgrew would have been the better option with a vicious inswinger. Then when Charlie delivers one – because Maloney had just taken one at the other side and couldn’t be arsed jogging over – we give the gig back to Maloney….who floats ANOTHER one in that misses everybody! Fecken amatuer hour!!!



    Come On Ireland!!!

  16. Scotland game, we got what we deserved, I feel bad for them but somehow I also feel detached.



    Hail Hail.

  17. Georgia 1 Scotland 0.



    ” A deserved victory for the better team ”



    Italian radio 4 9 15.

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4
  6. 5
  7. 6
  8. 7
  9. 8
  10. ...
  11. 43