Marrache & Co spent £4m overdraft in four days, court told
Marrache & Co spent a £4m extension to its £6m overdraft in just four days in 2008, the Supreme Court was told yesterday as it continued to hear evidence from the Jyske Bank employee who handled the firm’s accounts before its collapse.
Although the overdraft extension had been authorised, the speed at which it was spent rang alarm bells at the bank’s headquarters in Denmark and raised concerns about the firm’s liquidity.
The evidence was heard as Bill Bishop, a Senior Credit Administrator at the bank, took the stand for a second day at the Supreme Court.
The court is hearing a lawsuit brought by the liquidators of Marrache & Co, Adrian Hyde and Edgar Lavarello, who hope to recover £6.7m of clients’ money and several million more in interest.
Mr Bishop oversaw all Marrache & Co’s office and client accounts at Jyske Bank from 2003 until the firm’s collapse in 2010.
Yesterday the court heard how Jyske Bank received a total of £1.26m from Marrache & Co in respect of interest and fees and had extended the firm’s overdraft multiple times.
Liquidity concerns for Marrache & Co arose after Jyske Bank in Denmark raised the issue in 2008.
Mr Bishop confirmed to the court that Marrache & Co accounts had been blocked in 2008 after a transfer instruction exceeded the firm’s overdraft limit at the time.
David Alexander, QC, on behalf of the liquidators, asked if Jyske knew of Marrache & Co’s financial position.
Mr Bishop replied that although it had knowledge of the personal finances of the Marrache brothers, the bank did not have any record of the firm’s finances.
The court heard how the overdraft facility was extended in July 2008 to meet Marrache & Co’s financial demands.
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