Consequently, the company does not expect to recover the debt from SwE. The company 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 initially claimed they were entitled to rescind the personal guarantees and indemnities offered to the company in 2020 and 2022 as they alleged that 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 did not consider this a valid defence and the company instructed counsel to prepare a court claim (number BL-2024-MAN-000010) against the two parties which was filed with the High Court on 25 January 2024. Following discussions with the defendants, a settlement agreement was concluded on 24 May 2024 and a sealed Tomlin Order was provided by the Court on 12 June 2024.
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 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 has recognised an impairment charge in the 'interest payable and similar charges' line in respect of interest due on the loan, recharged legal costs and interest due on the personal guarantees for the year ended 31 March 2024 and an impairment reversal in the 'interest payable and similar charges' line to reflect the discounted value of amounts due under the settlement agreement as at 31 March 2024. The company recognised a further impairment reversal in the 'interest payable and similar charges' line to reflect the unwinding of the discount in the year ended 31 March 2025.