In this insight, we look at the importance of professional asset tracing in cases of individual and company insolvency and the multidisciplinary skills and experience we at Matrix Intelligence bring.
The challenges of Asset Tracing in Insolvency cases
We live in a globalised economy, where businesses and individuals can operate across multiple jurisdictions, and move assets with considerable speed. Establishing a picture of a person’s wealth is particularly important in cases of fraud and insolvency, where the original asset is misappropriated, exchanged, or substituted for another asset.
When it comes to insolvency and tracking down the assets of a debtor, it is a contentious and complex field, one seldom straightforward. Significant challenges include:
- Time/Location: The person in question has usually had a ‘head-start’ on placing his/her assets out of obvious sight prior to formal insolvency. They may be anywhere from foreign jurisdictions with weaker laws and enforcement, to unidentifiable associates/family members, trusts and offshore banks.
- Funding: There are usually limited resources in what can be a costly, lengthy, and often international search.
- Differing legal jurisdictions: If the assets are overseas, there can be many issues related to the different legal systems, accessibility of records and data protection.
Corporate intelligence has a huge role to play in the navigation of this web of legal, geographical, and human lines of cross-border investigation.
At Matrix, we have the resources, investigative knowledge, and expertise, to map the counterparties involved and understand their relationship to the debtor.
Asset Tracing Investigations
A major difficulty with an asset tracing investigation, is that there is no way of knowing in advance what the outcome will be and how it will relate to the initial cost; with insolvency practitioners (IPs) required to justify all spend.
Utilising professionals who are able to obtain the right intelligence, will clarify from the outset whether a complex pursuit is viable in terms of likely recovery and/or enforcement.
At Matrix our approach is transparent and accountable. We will advise if the outcome is likely to be positive or not, i.e. if we assess that the target has no material or obvious assets.
We conduct our preliminary asset tracing investigation at no cost to the client, allowing us to honestly manage their expectations and shape the initial case strategy.
We split our investigations into two distinct phases, both outlined and clearly costed, in our client proposal:
Phase 1 – Open Source Intelligence (OSINT): this is the identification, access and analysis of relevant public records, wherever in the world they may be, and in whatever language. It is based on a specific intelligence requirement and framework, due to the sheer volume.
This can range from information available on major search engines, to that of the deep web i.e. documents not indexed, including databases and files. These days, most countries have digitised important records, such as shipping data or corporate filings, but the level of accuracy differs depending on jurisdiction.
Once we complete OSINT and identify potential leads to assets, we often need to progress to HUMINT to delve deeper.
Phase 2 – Human Intelligence (HUMINT): entails the gathering of information and intelligence, through our established network of tried and tested human source experts, from numerous backgrounds, including the military, police, journalists and local investigators.
This can be an important route for gathering valuable information from people such as former employees; clients or advisors to the debtor.
By using this balanced methodology, we offer clients a realistic outcome which is actionable and highly-effective. Our findings are then presented in a concise, factual and court-ready manner.
The future of Asset Tracing and Insolvency
We are at the precipice of a rise in UK insolvency due to a downturn in the global economy; in large, attributable to the repercussions of Covid-19. Government measures enabled debtors a stay of execution in facing their creditors, however; time is running out and many will now inevitably be targeted with insolvency legislation.
When coupled with the more creative ways that individuals are able to hide their assets, particularly with developments in new technologies, the requirement to engage professional investigators is greater than ever.
Whilst costs underlie most decisions made by IPs, engaging specialist intelligence companies such as Matrix, to gather the correct intelligence and build a strong, cost-effective case is key to successful recovery.
Professional investigators are as important to a successful outcome as forensic accountants, or lawyers. Failure to employ one could result in a lost Court case and little or no returns to creditors.
For more information on our asset tracing capabilities, contact us at: info@matrix-intelligence.com or online at www.matrix-intelligence.com.
