BT 64 05

7 December 2005

Statement on A G (Manchester) Limited (formerly The Accident Group Limited) – In Liquidation (“TAG”)

On 29 September 2005 joint liquidator Paul Stanley of Begbies Traynor defeated an attempt by TAG’s former auditor KPMG to resist a full and comprehensive disclosure of KPMG’s documents under s236 of the Insolvency Act 1986. In a comprehensive ruling the court ordered KPMG to provide unfettered access for the joint liquidator to all audit working papers, internal emails, spreadsheets and all documentation relevant to TAG. This Included the computers of key KPMG staff working on TAG.

Paul Stanley said that he thought that this ruling represented a landmark case in the provision of information to a liquidator seeking to understand the affairs of a business and the state of mind of the directors prior to formal insolvency. “The court has shown that it would not tolerate KPMG’s resistance to the reasonable requests of a liquidator seeking information. KPMG managed to delay the disclosure of vital information in this liquidation for a considerable number of months and the information now revealed has been most illuminating.” TAG went in to liquidation in January 2004 with a deficiency now estimated at above £100 million.

In a separate legal action on 2 December 2005 Paul Stanley was successful in bringing two claims against Deborah Langford who held the position of business development director at The Accident Group. Mrs Langford was ordered to pay £45,000 on account of the costs of pursuing her in England and Spain to answer questions. A second claim for £253,220 was ordered against her for misfeasance, breach of fiduciary duty and entering in to a transaction at undervalue in that she took a salary and claimed expenses in the two years before TAG’s failure but appeared to have done nothing to earn this money. Additionally Mrs Langford was ordered to pay the sum of £70,185 interest on the money taken as salary.

The court gave judgment in full against Deborah Langford and ordered the costs of the proceedings against her in the sum of approximately £16,000. Deborah Langford has until 16 December to pay the costs of the first claim and 23 December for the second claim to discharge in full. The court heard that Mrs Langford had taken every opportunity to resist answering questions from the Liquidators who had to go to extreme lengths to achieve this including issuing proceedings against her in England and Spain. She travels between her house in Spain and England frequently and was recently seen at a party in Alderley Edge. Her claim of being too ill to answer questions was rejected by the court.