EXCLUSIVE by OUR BUSINESS STAFF
Statements coming from the Avocet Group's company secretary while multiple attempts were being made to serve payment demands on the firm's chairman and his wife were described as 'startling' by the judge in a bankruptcy hearing earlier this week.
Barrister Eirlys Lloyd, the appointed secretary of more than a dozen companies in which Martin Frost or his wife Janet have an interest, resides at a property in Palace Street, Berwick-on-Tweed which has also acted as the registered address for numerous 'Avocet' businesses.
The conduct of Mrs Lloyd when representatives of the petitioners visited her home in a bid to serve statutory demand notices had been mentioned at a previous session of the Business and Property Court in Leeds in September. At that time Jonathan Rodger, counsel for bankruptcy petitioners United Kingdom Agricultural Lending Ltd. (UKALL) referred to what he called "a schoolboy attempt to evade service".
The Frosts suggested the petition should be set aside as the statutory papers had not been properly served on them.
But on Monday of this week, in her judgment which rendered Mr and Mrs Frost bankrupt, Judge Joanna Geddes outlined the actions of Mrs Lloyd in considerable detail.
She said: "I must decide whether the statutory demands were properly served".
The judge explained that when Ms Lloyd returned the statutory demand and appointment letters which had been delivered to Palace Street on 1st April 2020 she made three claims by way of individual bullet points.
These were: "Neither Martin Frost nor Janet Orr Frost have, or have had a place of business or any arrangement which has any connection to my home; No direction has been given by either Martin Frost or Janet Orr Frost to serve documents at 25 Palace Street, Berwick; I do not accept service on behalf of either Martin Frost or Janet Orr Frost in respect of their personal matters. I am not authorised to do so and I would never accept such authorisation with personal matters"
Said Judge Geddes: "Those claims are startling given what I set out next."
She continued: "25 Palace Street may be the residential address of Eirlys Lloyd but it’s also the registered address of 14 companies of which Mr Frost is a director and four of which Janet Frost is a director as set out in the statement of Georgina Johnston [a witness for the petitioners].
"Certainly it’s the residential address of Eirlys Lloyd in her capacity of sole director of Eirlys Lloyd Company Services Ltd and is also that company’s registered address. Eirlys Lloyd Company Services Ltd acted as company secretary of Orrdone Farms (the insolvent company which obtained the loan from UKALL) and many if not all of the companies the Frosts are interested in.
"Further, it is the address named by Janet Orr in her personal guarantee [for the loan] as the address to be used for all notices, and, fourthly it’s the address at which the original demands by letter were sent and received in early March 2020. Those demands by letter were received and Mr Frost replied to them on his own and his wife’s behalf. Nothing within his replies would have alerted UKALL to any objections to receiving post at that address".
In his submission to the court on Monday Mr Frost outlined in detail how he would soon be able to repay the £4 million due to UKALL.
He told Judge Geddes: "the situation is very clear on the ability to pay. Another company called Avocet Natural Capital - its subsidiary recently sold some intellectual property and this is the intellectual property which is very valuable which relates to the production of jet fuel from air, in other words is by sophisticated methods taking the carbon out of the air and translating it into fuel.
"The original transaction was completed in June, that’s June of this year and the consideration at that time was $100M (US). Due to problems which followed that consideration was reduced to £$40M. That $40M consideration was to be paid in two tranches, one in September and the second in February. The $20M tranche has duly been paid, the missing problem with the $20M tranche was the fact that one then had to get withholding tax, US withholding tax consent, so in other words one can remit the money from the US without it being subject to roughly a 30% tax. That consent eventually came through on Friday last and the money currently is available in the US and it will take between four and ten days for that money to be transferred."
When Judge Geddes put it to Mr Frost there was no documentary evidence as to the existence of the money he said: "The only question on the money at the moment is the method of payment and there is some debate on whether it should go in to a client’s account or a joint escrow account, as such. The evidence of the money has been provided to our solicitors."
In a letter to 'colleagues' today Mr Frost has given his reaction to yesterday's court decision.
States Mr Frost: "Unexpected to Janet and I, we were made bankrupt on 18th October, at Leeds County Court. Janet and I are appealing on legal grounds. May I thank all of you who have sent your commiserations.
"Yesterday afternoon and last night, I spent time with lawyers discussing what this means to us all. All were surprised that UK Agricultural Lending Limited’s counsel on Monday suggested to the court that Avocet was engaged in alchemy and that by inference there is No Avocet Patent Value.
"Shortly put, my bankruptcy: Does not upset, the forthcoming ANC Plc dividend. Because pending payment was refused by the Petitioners: this supports my lawyer’s contention that my Bankruptcy Petition was prematurely raised for collateral purposes. Provides a possible extra £6.6 million for alternative Avocet investment or litigation· Now enables indemnity Bankruptcy Petitions to be raised.
Personally, I had hoped that with the good dividend news and excellent happenings with Genfro that we had a chance for peace. Sadly, such has not happened.
"In the UK until our English Bankruptcy appeal application are heard we need to resign as a director of UK companies. Because I hold main citizenship elsewhere in differing jurisdictions, matters will largely wait until my UK appeal hearing as to implications."
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