EXCLUSIVE by OUR COURT REPORTERS
The evidence provided by business associates of 'controversial entrepreneur' Martin Frost has attracted strong criticism in a court judgment which concluded the former Avocet Group chairman used £425,000 of company funds to bankroll property acquisitions in Scarborough.
The bankrupt joint life president of Genfro Ltd., seen as a successor to the failed Avocet 'wonder fuel' operation was deemed to have breached his fiduciary duties as a company director by transferring substantial sums of shareholders' money from the coffers of the now insolvent Omega Infinite PLC into one of his personal bank accounts before it was used to buy two flats.
In a bid to head off an application from Omega's joint liquidators who are attempting to repossess the apartments on the Yorkshire resort's Esplanade, Mr Frost submitted statements and bundles of written evidence including contributions from Eirlys Lloyd, barrister and former company secretary of several Avocet businesses, and from Michael Robinson, a fellow company director.
However, District Judge Christopher Royle, who delivered judgment in the case at Leeds court, appears to have been less than impressed by the assertions made by Ms Lloyd and Mr Robinson.
The judge notes: "I will observe that the Frosts' material is of very significant length, very dense, and is (in certain regards) best described as intensely challenging."
In a scathing dismissal of Mr Frost's evidence, Judge Royle declares: "The vast majority of Mr Frost's statement does not go to the issues at all. Instead, it deals, in prolix terms, with matters such as he and Mrs. Frost's dissatisfaction with threats of visits from Mrs. Frost's wider family, an alleged falling out between Mrs. Frost and others in the Orr family, historical litigation in Delaware said to involve Omega (then Avocet), and some (irrelevant) history of Mr Frost's career.
"The statement goes on to advance three contentions of which only one has any potential relevance to the issues before me. The other two are an assertion that Omega was not "cash book insolvent" on 30th March 2020 (which is irrelevant in light of the winding-up order), and an assertion that there is an "ongoing plot to denigrate Martin Frost and Avocet", which does not touch on the questions I have to answer at all."
Judge Royle then says: "Insofar as Mr Frost then goes on to make assertions of fabrication and fraud against various individuals, those are entirely unsupported by documentary or other evidence and I reject them."
The court had before it statements from Michael Robinson, a director of Loch Lomond Heritage, the company which Mr Frost claimed (unsuccessfully) owned the Scarborough properties.
According to the judgment: "Michael Robinson, a director of Heritage, gave two statements. The first simply says that he accepts the "broad thrust" of Mr Frost's evidence. I pause to wonder whether those were his own words given the similarity between that and Mrs. Frost's evidence, and the remarkable coincidence of format between those two statements, that of Mrs Frost, and Mr Robinson's second statement. As I have not heard submissions on the point, I shall say no more about it."
The judge says he also paused to note that none of the first three of those statements has a statement of truth which would, of itself, be grounds for disregarding them. Mr Robinson's second statement was mostly definitional; insofar as those definitions assert facts, there was no documentary evidence to support them and 'I reject them'.
Judge Royle then considered the content of so-called Bundle B, one of a number of collections of documents submitted in evidence during the course of proceedings.
He states: "Bundle B contains, in the main, dense narrative allegations by someone named Eirlys Lloyd, to whom I shall shortly refer. From "Report One" it appears this individual was the company secretary of Omega. Accordingly the reports are in no way independent."
After reading Bundle B, Judge Royle says he agrees with Steven Fennell [counsel for Omega's joint liquidators] and his clients that it was irrelevant.
"It contains a series of "reports" by someone claiming to be a retired Scots Barrister, none of which seem germane to my enquiry, which make serious, but apparently unsubstantiated, claims about professionals of one variety or another for which there are other forums if they are to be pursued, which are unnecessarily prolix, dense, and of no apparent utility to the decision I have to make.
"The reports give the distinct impression that the author has some deeply felt antipathy to insolvency professionals and those who work with them. None has a statement of truth. They are simply opinions without supporting documentation. (None of the "Inventory of Productions", which I take to be akin to exhibits, in fact has any attached or exhibited documents). The production of Bundle B as material the Frosts wanted me to read was, save for the exceptions below, a grotesque waste of the Court's time and that of the Applicants".
In a reference to the Frosts' bankrupt status, the judgment notes their discharge from bankruptcy had been suspended by order of District Judge Anesh Pema made on 20th March 2023.
"Perusal of the judgment reveals that he considered neither of the Frosts were properly co-operating with the Trustee in Bankruptcy. He observed that 'none of the limited answers have been provided [to the Trustee] have been provided in a simple or straightforward way'. For reasons I shall return to, that is a modus operandi which Mr Frost adopted before me also."
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