On 24 November 2020, the company made a loan to Screen With Envy Limited (SwE) of £1,012,400 secured by a debenture upon SwE and personal guarantees and indemnities from the directors of SwE (Thomas Christopher Chichele Birkert and Lynne Sophie Birkert).
The loan was due to be repaid in full on 26 July 2021, however SwE failed to make repayment in full. The company agreed a restructuring of the loan on 22 March 2022, which involved subordinating the company's debt to Santander Bank plc and a renewal of the guarantees and indemnities from the directors of SwE.
SwE entered creditors' voluntary liquidation in November 2022 and the statement of affairs at 16 November 2022 showed a deficiency as regards creditors of £7,308,283.
Consequently, the company does not expect to recover the debt from SwE. The company has commenced enforcement action against Thomas Christopher Chichele Birkert and Lynne Sophie Birkert in accordance with the personal guarantees and indemnities signed by the two parties in 2020 and 2022. The two parties have claimed they are entitled to rescind the personal guarantees and indemnities offered to the company in 2020 and 2022 because Richard Jackson (a director and benefiical owner of RJJW Limited and also a director and beneficial owner of 2242242 Limited which numbered SwE among its clients) misrepresented the financial standing of SwE to them; on the basis that the parties would not have entered into the personal guarantees and indemnities had they known the 'true' state of SwE's financial position.
The company does not consider this a valid defence and the company's counsel has prepared a court claim against the two parties. The claim is pending filing, while the company reviews a number of without prejudice offers and disclosures from the two parties.
Due to the recoverabillity of the loan being uncertain, the company recognised an impairment charge in the 'interest payable and similar charges' line equal to the loan outstanding at 31 March 2022 (£452,613) in the profit and loss statement for the year ended 31 March 2022. The company has recognised another impairment charge in the 'interest payable and similar charges' line equal to the sum of the interest due on the loan, recharged legal costs and interest due on the personal guarantees for the year ended 31 March 2023 (£154,423) in the profit and loss statement for the year ended 31 March 2023. The company will continue to seek maximum recovery of the loan amount, plus interest and legal costs incurred.