Paul Pretlove “is excellent”, according to respondents in our research, who add that he is “energetic, ultra-responsive, very commercial and a good listener.”
Paul is an managing director of Kalo in the British Virgin Islands. He specialises in offshore asset-tracing and fraud investigations, and assists stakeholders in achieving financial recovery through formal insolvency appointments and complex cross-border litigation. He is an expert in international asset tracing and recovery, commercial and shareholder disputes, and contentious directorship and trustee appointments. Paul has been involved in the most significant insolvency and restructuring matters in the BVI, including several Madoff-related appointments.
What motivated you to specialise in asset recovery?
I enjoy making a difference to people by surpassing asset recovery expectations; creating solutions for difficult-to-recover assets; persevering with asset recovery strategies; and investigating and identifying assets or claims that otherwise were not apparent or anticipated. I have a strong desire to make a difference and have a difficult time giving up on something I believe in, which helps.
You have been involved in recovering significant assets in the Madoff estate. What insights and lessons can you share about this mandate?
This assignment concerned significant fraud investigation aspects; several outbound pieces of litigation in several jurisdictions; and a complex set of circumstances. Successfully navigating a case like this has required the right professional team and the right understanding of the interplay between competing courts, legislation and processes. Seeking recognition of the original appointment in other jurisdictions and availing ourselves to foreign courts has been crucial to the successful recovery of hundreds of millions of dollars for creditors and investors.
You have been recognised as a BVI liquidator in mainland Dubai and in Singapore. How do you see this shaping your practice?
We have paved the way to access these and other foreign courts, and to seek assistance from them in our investigations, pursuing litigation and ultimately recovering assets. With BVI companies used frequently as the ultimate parent of varied structures globally, I expect us to see more engagement in these jurisdictions. My understanding is that the Dubai courts want to be perceived as a place that will support international trade and assist when things go wrong. Similarly, with the introduction of the UNCITRAL Model Law on insolvency in Singapore, it seems to want to be a global insolvency hub much in the way it has done with litigation and arbitration.
How do you think there can be more collaboration between the public and private sectors to recover assets globally?
There is a misconception that the criminal and civil routes to recover assets following a fraud are somehow mutually exclusive. However, several jurisdictions have explored and shown how public or private partnerships can complement each approach and maximise recoveries for victims. I am a strong believer in using all the tools available against unscrupulous individuals like this, and have been developing thinking in this area in the BVI via an informal asset recovery working group, where participants explore how such partnerships can be formed to work together for the greater good.
Why do you think there has been an increase in the use of court-appointed receiverships to protect and preserve assets pending wider disputes?
The appointment of court receivers in the BVI is not new, and is a common remedy to a number of disputes to protect, preserve or realise assets. However, in recent times, certain clarifications in case law about the triggers to appoint a receiver, over which rights (such as the right of revocation of a trust), in support of which proceedings (such as to police a freezing order), over which assets, and when and how enforcement can occur, have all led to the increased popularity of this relief in the BVI. These cases have been novel and groundbreaking at times – the BVI Court is open and willing to hear and address disputes and claims proactively, innovatively and effectively, deploying its court officers to assist.
Do you have any advice on how to work with different jurisdictions globally effectively?
Having the right team of qualified, experienced professionals is crucial when venturing into other jurisdictions, so you need to find and select the right partners to help you to understand the differing legislation, customs, practices, markets and even politics that affect an asset recovery strategy. Getting the first step into that territory right will often shape your success when making global asset recoveries in my opinion.
How would you like to develop your practice over the next five years?
It is hard to predict the impact of what we are seeing developing now on asset recovery practices in the next five years, but I think that diversification of services will be important for asset recovery practitioners, using a wider range of skills and experts in-house to develop practices and strategies to support lawyers, clients and work referrers in many and different ways. I think it will be key to stay on top of technological developments such as blockchain, and to understand how such assets can be valued, identified and recovered (and how they are misappropriated in the first place).
What is the best piece of career advice you have ever received?
It was the old adage that you should be nice to people on the way up, because you may meet them on the way down, which I have also taken to mean: treat people fairly and how you would expect to be treated. However, applying that to an asset recovery context involving perpetrators of fraud and crime, you get the same treatment on the way up or down: the most thorough of interrogations and investigations of their financial position, with a view to relieving them of their ill-gotten gains and permanently disrupting and deterring their activity.
Paul is an MD of Kalo in the British Virgin Islands. He specialises in offshore asset-tracing and fraud investigations, and assists stakeholders in achieving financial recovery through formal insolvency appointments and complex cross-border litigation. He is an expert in international asset tracing and recovery, commercial and shareholder disputes, and contentious directorship and trustee appointments. Paul has been involved in the most significant insolvency and restructuring matters in the BVI, including several Madoff-related appointments.
Describe your career to date.
My career began in insolvency 20 years ago in England, where I completed my ACCA and JIEB professional examinations before taking up a role with what would become Kalo’s office in the Cayman Islands. I ultimately moved on to its BVI office, where I have been for the past eight years, and have worked and continue to work on a varied range of insolvency assignments, from small nil asset/liability solvent liquidations right the way up to significant and complex restructuring assignments.
How is the field different to when you were starting out?
A lot has changed in that time in insolvency and restructuring, but I see the main highlights being attempts to reduce the negative stigma attached to insolvency and to encourage enterprise; the development of the types of appointment and tools available to insolvency practitioners and stakeholders to achieve business rescue/restructuring; a broader understanding of the role of insolvency practitioners; the development and adoption of the UN’s model law on cross-border insolvency; and the willingness of courts to engage in novel cross-border communications and schemes.
What skills are necessary to be a successful cross-border restructuring and insolvency practitioner?
I view having a base in accounting and/or law; being able to adapt to fast-changing situations; and being able to confidently and calmly navigate high-pressured situations in a focused, strategic and technical way as very important skills in being a successful restructuring practitioner.
How significant was the decision in the Constellation case, which used soft-touch provisional liquidation? What impact will this have on the BVI market?
This is a first of its kind in the BVI and has been an important development
for the territory. It has shown the willingness of the BVI courts to adopt creative and innovative approaches. It is a message to the global restructuring community that the BVI courts are ready and willing to support you. This puts the BVI on the offshore restructuring map, and demonstrates its resources and experience to do this. I expect that having seen this successful restructuring, many more will look to protect BVI holding structures in a similar way as part of global restructuring efforts.
What impact do you see covid-19 having on the restructuring field?
It is really difficult right now, as we globally endure the effects of the pandemic, to predict what might happen when totally unprecedented things are happening – like US crude oil prices turning significantly negative. What is certain is that companies have already failed and are undergoing restructuring, and it is almost certain that these significant shifts in pricing of assets and commodities will cause many more to do so.
If you were an investor in distressed markets right now, what moves would you be making?
I suspect that distressed market investors will be readying themselves for lots of new activity, and perhaps unprecedented opportunities, and they may see new entrants in their markets as other investors look for opportunities to diversify and to take advantage of suppressed asset values. I have been contacted by many such operators looking to speak to restructuring experts with a view to assisting where possible, and to help shape new markets and opportunities from an early stage.
What makes Kalo stand out from its competitors in the market?
Kalo is an independent insolvency and restructuring practice, which is fundamental to our success. Being independent and conflict-free means that we are able to turn conflict checks around fast, and get to work on appointment in hours rather than days. This agility puts our clients, and stakeholders, at a significant advantage.
Kalo also benefits from having one of the most experienced teams in the offshore market. Its senior appointment holders have track records that each go back between 20 and 25 years, or even more, working on some of the industry’s highest-profile matters, involving high-value cross-border litigation and significant recoveries for clients.
The Kalo teams in Cayman and BVI have not just recovered assets from the typical jurisdictions; our interesting assignments have seen us recover assets from Ukraine, Thailand, Gabon, Rwanda, Burkina Faso, Namibia, Vietnam, Mali and Ivory Coast. Kalo has often been at the cutting edge of industry developments, with ground-breaking approaches, and the firm has achieved many industry firsts.
Kalo has become recognised as the go-to independent firm for contentious offshore insolvency, restructuring and asset recovery appointments.
What has been your greatest achievement to date?
My greatest work achievement would have to be bringing an end to over a decade of litigation in the liquidation of significant funds invested in the Madoff estate, through successful mediation that resulted in the recovery of hundreds of millions of dollars for victims.
My greatest personal, mental and physical achievements would respectively have to be becoming a father to my three young children; navigating the return of Kalo’s BVI practice after the 2017 hurricanes that devastated the Caribbean region; and honouring a great friend, and at the same time raising funds for charity, by running a 54km “ultra” marathon in my back garden during full 24/7 covid-19 lockdown.