Urgent action required: Campaign against Hollis

Posted on December 6, 2012


 

News has reached us here in the States that the vote on Monday (December 3rd 2012) to remove dodgy insolvency practitioner Peter Hollis from the role of administrator of Connaught Asset Management Limited (‘CAM’) descended into farce. We hear that the overwhelming vote for his removal by investors was overturned by a series of shifty moves by the discredited accountant, aided and abetted by self-serving law firm Kennedys and our good friends at Blue Gate Capital.

 Together, the three conspired to: 

  • Ignore more than 98p in the Pound of most investors’ claims against the company
  • Misrepresent the true date that the Fund was suspended
  • Overlook the fact that CAM had no right to suspend the Fund in the first place
  • Deny the existence of a number of valid redemption notices

 Moreover, they allowed Hollis effectively to exercise a knockout block vote in his own favour, placed by the Connaught Income Fund Series 3 – which is managed by CAM’s wholly-owned subsidiary, Connaught Administration Services Limited (CAS). This combination of ignoring most of the votes against him and voting for himself enabled the dishonest insolvency practitioner to claim that the majority of creditors were in favour of him burying his snout deeper into the trough of creditors’ money, against their clearly expressed wishes.

Regular readers will recall that Hollis stood accused in a High Court case in July 2010 of lying to creditors of insolvent fashion chain Miss Sixty; when he failed to attend the hearing, the Judge directed that the evidence be presented to his professional body, the ACCA, with a view to his conduct being investigated and, if proven, his right to practice terminated. Cynical readers may suspect that self-policing occupations drag their feet when faced with complaints and seldom issue severe sanctions against members. So it prove in Hollis’ case, which explains why he’s still permitted to practice.

 Just as the ACCA deserves to shoulder much of the blame for this latest setback in investors’ attempts to secure what remains of their money and assemble evidence against those who stole it, so must Kennedys. The law firm is engaged and paid by CAM, not Hollis, and is liable to the company in administration. It may have acted negligently; or worse, knowingly to have perverted the vote at the creditors’ meeting to keep its favoured administrator in post – and, of course, maintained its retainer to undertake the associated legal work. In the USA, we would call this racketeering. 

 We think the ACCA would much rather sacrifice Hollis’ career than jeopardise its right to self-regulate by provoking a mass write-in by investors to The Insolvency Service. And we bet that Kennedys would prefer to rethink its view of Monday’s vote than face a deluge of complaints to the Solicitors Regulatory Authority. We therefore urge investors to send two emails, as follows:

 1. Barry Cooper, President, ACCA

 

Email: president@accaglobal.com

 Dear Mr Cooper,

 I write as an investor in the Connaught Income Fund Series 1, which I believe was misrepresented and mismanaged, potentially fraudulently, by its general partner, Connaught Asset Management Limited (‘CAM’). CAM is now in administration and faces claims from investors for the losses they have sustained.

 I am aghast that a member of your organisation, Peter Hollis, has been able to secure appointment as the administrator of CAM despite a High Court judge accusing him of professional misconduct and directing your organisation to investigate the matter and discipline him, almost two and a half years ago. It raises questions about whether the ACCA is in the business of protecting incompetent and dishonest insolvency practitioners from creditors, rather than the reverse.

 Accordingly I ask that the ACCA completes its investigation and issues the appropriate sanction, namely barring Hollis from practising, within the next 28 days. Should it fail to do so, I will escalate this matter to The Insolvency Service and will advocate not only their long-overdue intervention in the Hollis case but also a review of whether your organisation can continue to be entrusted with investigating complaints against practitioners.

2. John Harvey, Partner, Kennedys Law LLP

 Email: j.harvey@kennedys-law.com

Dear Mr Harvey,

 I write as an investor in the Connaught Income Fund Series 1, which I believe was mis-represented and mismanaged, potentially fraudulently, by its general partner, Connaught Asset Management Limited (‘CAM’). CAM is now in administration and faces claims from investors for the losses they have sustained.

 It is my understanding that your firm has been engaged by Peter Hollis, administrator, to act for CAM, and that you advised the firm in relation to the two creditor meetings held on 26 November and 3 December.

 It is my understanding that a clear majority by value of the votes placed by creditors were for the removal of Hollis as administrator and for his replacement by named individuals from Zolfo Cooper. By a combination of tactics, including disregarding a number of investors’ redemption notices, failing to verify an inaccurate schedule submitted by Blue Gate Capital of the value of their claims and admitting a large claim from a connected creditor voting in favour of Hollis’ retention, namely the Connaught Income Fund Series 3 as represented by CAM’s wholly-owned subsidiary Connaught Administration Services Limited (‘CAS’), you and Hollis were able to misrepresent the vote as one in favour of his retention. Your firm appears to have overlooked that an administrator should respect the clearly expressed wishes of a majority of creditors rather than act in the self interest of Hollis, the administrator.

 The purpose of this letter is to put you on notice that if you do not take all reasonable steps within the next seven days to remedy this deficient conduct, it is my intention to raise a disciplinary grievance about your firm’s conduct and that of Mike McCarthy, Scott Porter and yourself with the Solicitors Regulation Authority.

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