A court has approved a £1.07m bankruptcy order against the former boss of disgraced Axiom Ince, over failure to make payments for the law firm he acquired last year.
Axiom Ince went into administration last year after it was revealed over £60m of client money went missing, leading the boss, Pragnesh Modhwadia, and others, to be suspended by the legal regulator.
The drama kicked off after notable Ince Group went into administration last year and was recused in a deal worth £2.2m by Modhwadia’s firm, previously known as Axiom DWFM.
You can read here on City A.M. on the full timeline of the fall of Axiom Ince.
Last month, the administrators of IGD Realisations, IGD Services Realisations and IGD Holdings Realisation (all known as Ince Gordon Dadds) filed a bankruptcy petition against him.
According to the creditors skeleton argument, Modhwadia is liable for the failed payments of Ince totalling £173,289.54. In light of non-payment, further instalments of the deferred consideration totalling £300,000 have fallen due between November 2023 and April 2024. In addition, further instalments of the deferred consideration totalling £600,000 will fall due between May 2024 and April 2025.
Pragnesh Modhwadia outside court. Source: Michael Cross, Law Society Gazette
On Monday, barrister Phillip Gale of Enterprise Chambers for the IGD parties was at a hearing at the Insolvency and Companies Court over this order. He was unopposed as Modhwadia did not show up.
It was noted at the hearing that a solicitor for Modhwadia had emailed IGD’s solicitor at Pinsent Masons confirming that Modhwadia had been unable to make sufficient progress with the preparation of a proposal for an individual voluntary arrangement.
It was stated in the email as outlined in a skeleton argument seen by City A.M. that access to his personal financial information and other relevant documents has been severely hampered . This was due to the Solicitors Regulation Authority (SRA) intervention as well as legal proceedings by the administrator of Axiom Ince.
The email noted that in order to avoid incurring “unnecessary costs” he would now be represented at the hearing.
After a very short hearing, Insolvency and Companies Court (ICC) Judge Prentis awarded the bankruptcy order against Modhwadia at 10:34am on Monday. The ICC Judge Prentis did not see any effect this decision would have on the ongoing Axiom Ince civil proceedings.
Commenting on the decision, Jim Varley, partner at Devonshires who represents the administrators of Axiom Ince, said: “The bankruptcy of Pragnesh Modhwadia is a significant step in this ongoing saga. Hundreds of clients of Axiom Ince lost large sums of money which has deeply affected their lives. While the bankruptcy order against Pragnesh Modhwadia will not of itself bring their money back, we hope it offers them some comfort that action is being taken.”
The collapsed the firm sent shock waves throughout the legal sector including a heated debate over a proposal by the regulator of increasing the annual levy solicitors pay in order to cover the collapse.
Last November, the anti-fraud agency the Serious Fraud Office launched an investigation into suspected fraud at Axiom Ince.