A controversial loan firm which targeted bankrupts has gone into administration.
Consolidated Finance Limited collapsed last week with David Rubin and Henry Lan of David Rubin & Partners LLP appointed to handle the case.
The business went under following a winding-up petition presented at Manchester District Registry Court by a Mr P McCluskey acting on behalf of the estate of a Miss Emma McCluskey, now deceased.
Consolidated Finance Limited targeted bankrupt individuals for business, offering them loans in exchange for having their bankruptcy annulled.
In a 2013 court dispute between two former customers of Consolidated Finance and its sister firm the Bankruptcy Protection Fund, a judge lambasted the business for the high interest rates it charged despite securing its loans against equity held in the property of its customers.
The RT. Hon Sir Stanley Burnton said that this practice effectively wiped out any risk Consolidated Finance faced, as it only lent if the bankrupt customer had sufficient equity in their property to secure the loan repayments and the charges for their services.
The Bankruptcy Protection Fund was subsequently wound up in August 2013 after the Court of Appeal ruled that the loan agreements were not drafted properly by sister firm Consolidated Finance Limited and were thus unenforceable.
Both businesses and a non-trading subisidiary called Alpha Mortgages Manchester – all run by an individual named Christopher Holmes – were also subjected to sanctions from the Office of Fair Trading in 2010.
In a statement issued by the OFT at the time, the regulator criticised each business over a lack of transparency in its dealings with customers and for failing to adequately outline the risks involved in taking their loans.
It also said the companies had also misled consumers about cancellation rights and, in one instance, failed adequately to take account of the needs of a consumer with limited mental capacity.
Credit Today has contacted the administrators and solicitors acting on behalf of Mr P McCluskey for comment, and will update this story should comment be forthcoming.
By Alex Cardno