Euroscan, a Nottingham based printing company went into receivership and a local businessman David Freeman sought to buy it from the receiver (a Big-Eight firm) for £320,000. The offer was rejected as being inadequate. Eventually, the bank became impatient and the company was forced into liquidation. But rather than contracting, the company became to expand. It even built new facilities and entered into a contract  to buy new plant and machinery valued at £700,000. All of this worried the company’s directors as in the event of the company failing to pay the banks and secured creditors, they may have been personally required to meet the obligations.

Euroscan was sold for half the original offer made by David Freeman to a company specifically formed by the receiver in which he himself was the major shareholder. The insolvency firm insists that the sale was concluded at ‘arms-length’. Responding to this case, Jack Maurice of the ICAEW stated , “There is very clear guidance in the ethical guidance which says that an insolvency practitioner shouldn’t allow himself, anyone in his firm, or any employee to acquire the assets of the insolvent company”.

A formal complaint was lodged with the IPA who expressed satisfaction with the practices of the Big-eight firm.