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Bankrupt IP issues complaint against Griffins and Grant Thornton partners 23 March 2011

Mistry, whose insolvency practice WM Proserv is being liquidated, has issued official complaint letters to the Institute of Chartered Accountants in England and Wales (ICAEW) against Kevin Hellard, partner at Grant Thornton, and Stephen Hunt, partner at Griffins.

The letters reveal details of how Grant Thornton and Griffins took on the book of cases left over after WM Proserv entered its liquidation process.

Mistry’s complaint is against Hellard’s and Hunt’s potential nomination as his trustee in bankruptcy.

Mistry alleges that if Hellard or Hunt were then appointed as his trustee, this would lead to a conflict of interest, due to their previous acquisition of the WM Proserv cases.

His letter alleges that the appointment of either IP would create, inter alia, “an unacceptable conflict of interest.”

In his letter, Mistry says that on November 3 last year, he consented to a block transfer of WM Proserv cases to Kevin Hellard and Stephen Hunt.

The complaint also claims that on August 8 last year Hellard issued proceedings against Mistry personally under the Companies Directors Disqualification Act (CDDA). Mistry is defending the proceedings.

Mistry says in his letter that if Hellard had been appointed as his trustee in bankruptcy, he would have had to sought Hellard’s consent – to defend proceedings that Hellard had brought against him.

His complaint letter alleges: “That of itself presents an unacceptable conflict.”

The complaint also mentions Louise Bell, partner at HBJ Gateley Wareing, who represented Hunt and Hellard when WM Proserv’s cases were transferred to them.

Bell suggested to Mistry in November last year that it would be prudent to notify his professional indemnity insurers that the WM Proserv book had been transferred, and that at some point in future, claims may be made against his policy.

Mistry was told it was inevitable that there would be an investigation into his conduct of the WM Proserv cases.

Bell told “When dealing with the block transfer of appointments from practitioners who no longer hold a licence, we suggest to them that they notify insurers of potential claims to protect their PI policy. 

“Primarily this is to protect the position of creditors but it is also beneficial for the insolvency practitioner who would otherwise have no insurance cover in the event that claims are made.”

However Mistry says he believes he was being told it was inevitable that Hellard or Hunt would bring actions, other than the CDDA case, against him.

His complaint letter alleges: “In view of both the current CDDA proceedings brought by Mr Hellard against me, and their intention to commence further proceedings against me resulting from their acquisition of the insolvency book, it would make their appointment wholly unjustifiable.”

But Hunt told “Griffins are not aware of any complaint by Mr Mistry nor are we are aware of any conduct that could lead to grounds for a complaint by him. We are mystified by this allegation and his previous comments in the media. We can confirm that we have no plans to bring any sort of proceedings against him.”

Hunt added that Griffins routinely advises all practitioners whom they succeed to make an early and comprehensive report to protect themselves, and the estates over which they held office, even where no claim has been made.

Hunt added: “We also recommend that RPBs remind their members when they are the subject of any complaint.”

Hellard said he was aware of the correspondence and that while he fundamentally disagreed with the allegations made by Mistry, it would be inappropriate for him to comment publicly on information allegedly sent to a regulator.

The ICAEW confirmed it had received the letters, but added that its disciplinary bye laws prevent it from commenting on such matters. understands that a creditors meeting related to Mistry's bankruptcy is scheduled for March 24.



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