ICSM Business Insolvency News: you can run but you can’t hide your social media – section 236 allows access to private online messaging in search for incriminating evidence

By Harry Mottram: When a firm goes bust it is very difficult to find out the real reasons for the collapse even if creditors have strong suspicions all was not well. Getting to the truth is usually left to the administrator and or law enforcement agencies, but that can months by which time those left with unpaid invoices have moved on. If a company shuts up shop suddenly and makes its workers redundant immediately locking the doors, shutting down their website and not answering the phone there’s often little that can be done.

Often the firm’s owners have moved equipment and computers to a new location, having set up a new company and declared the old business has been bought out. Unless the transition has been done legally it is likely to be fraud – but can be hard to prove.

Under a recent case Bankruptcy, Restructuring, and Insolvency practitioners at a London based practioners have used section 236 to obtain a company’s essential information and documents from instant messaging platforms. A court allowed the firm to use the data in a case where the owners where operating a property ponzi scheme although evidence was difficult to come by – but social media, messaging and emails laid bare the deception.

Creditors are often left frustrated when firms go bust and the directors attempt to cover their tracks, but this case revealed by Insolvency Insider gives hope that incriminating personal messages that show wrongdoing can be used to uncover vital evidence. And as a result, illegally acquired assets of the directors or owners can be accessed by administrators.

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