Thu, 7 May 2015 | By Colin Cottell, High Court, Fetter Lane, London

Kate Bleasdale, founder of healthcare recruiter Healthcare Locums (HCL), is a bankrupt, after a High Court registrar handed down judgement this morning.

Bleasdale, the serial recruitment entrepreneur who had enjoyed huge success in building HCL into a £172m international staffing company, was not in court as Registrar Briggs handed down his judgement.

Briggs told David Isaacs, counsel for Bleasdale and her businessman husband John Cariss: "Your clients are bankrupt." And he refused the couple's application for leave to appeal the decision. The original order bankrupting Bleasdale and Cariss was made on 30 April, with the two disputing parties being informed in writing before today's public hearing.

The court’s decision to bankrupt Bleasdale, along with Cariss, is the culmination of a seven-year legal battle with businesswoman Debbie Forster. Cariss was in court today, at times his head bowed and eyes closed.

Speaking after the hearing, a beaming Forster told Recruiter: "Justice has been done, finally." A grim and red-faced Cariss refused to comment. Isaacs, counsel for Bleasdale and Cariss, told Recruiter that Bleasdale had been unable to attend the court today because she was ill.

The court’s decision comes after years of disputes, legal wrangling and numerous court hearings both in the UK and in the US, where Bleasdale owned a Colorado ski lodge.

The origins of the dispute go back to 2008, when Forster was unlawfully ousted by Bleasdale for alleged misconduct from Stayput Solutions, a company that Forster had set up and in which Bleasdale had invested.

Over the years of legal wrangling that followed, the original compensation award for unfair dismissal of £300k mushroomed to around £4m as Bleasdale continued to fight Forster through the courts. The sum that Forster is owed includes legal bills of around £3.3m.

During the long legal dispute, in which Forster was often forced to represent herself, Bleasdale continued to resist paying Forster, despite two High Court judgements in December 2011 and again in March 2013, ordering her to do so. This forced Forster to seek to make Bleasdale and Cariss bankrupt to enforce judgement of a £3.3m court order.

In March this year a counter claim by Bleasdale was struck out by a court, while in December 2014, High Court bailiffs raided a Kingston-upon-Thames property owned by Bleasdale and Cariss as Forster sought to enforce judgements of the court order to pay the money owed to her.

Bleasdale’s bankruptcy represents a low point in the entrepreneur’s career that has seen plenty of ups and down, both in the boardroom and in the courtroom. Bleasdale began her career as a nurse earning £8k a year.

In March 2011, the former executive vice-chairman of HCL was dismissed by the company after the board learned about accounting irregularities. In 2012 Bleasdale made an unsuccessful £12m claim for unfair dismissal and sex discrimination against HCL.

Before her fall from grace, Bleasdale, who began her career in recruitment in 1987 after borrowing money from her parents, had risen to become one of the UK’s most successful recruitment entrepreneurs. After founding HCL in 2003 she had been flying high, owning 11% of HCL’s shares at time of her suspension from the company in January 2011, and earning more than £500k in 2010.

In 2010, turnover at HCL reached £172m after a string of acquisitions. Controversially, these included the £6.7m purchase of Redwood Health, a company belonging to Cariss, despite a warning by the company's auditors Haines Watts, who stated in the accounts: "The group's trading results to August 2009 are below those projected and should this trend continue the group may require further funding… These conditions, along with other matters ... indicate the existence of a material uncertainty, which may cast doubt about the company's ability to continue as a going concern."

However, despite concern over this deal, Bleasdale kept the confidence of the City, which supported a £130m refinancing in 2010 to fund a takeover of a healthcare recruiter in Australia. Weeks later, however, after huge accounting irregularities were found in the accounts, HCL’s shares were suspended, later to plummet.

In a career that has seen plenty of ups and downs, and no shortage of publicity, in 2002 Bleasdale won a record-breaking £2.2m for unfair dismissal and sexual harassment at Match Group, a previous medical recruitment firm that she had founded after the directors agreed an out-of-court settlement.

The one-time nurse, claimed that the behaviour of three board members left her “severely depressed and close to a nervous breakdown”. The former 2009 Entrepreneur of the Year, who as chief executive had overseen Match Group’s rise to become a £185m turnover company, said she was degraded by male fellow directors who sent her sexually explicit emails, ogled her breasts and kissed her in front of clients.

The court’s decision to make a bankruptcy order against Bleasdale and Cariss opens the way for Forster and other creditors to recover millions of pounds owed to them by the couple, by potentially forcing them to sell their home in Kingston-upon-Thames and other assets.

After making a bankruptcy order, the court appoints the official receiver (a civil servant in The Insolvency Service and an officer of the court) who has responsibility for administering the bankruptcy and protecting the bankrupt's assets. The official receiver also acts as the trustee in bankruptcy unless creditors decide to appoint an insolvency practitioner into this role. 

As bankrupts, Bleasdale and Cariss must co-operate with the trustee in bankruptcy, who takes control over their assets and uses the proceeds to pay the fees, costs and expenses of the bankruptcy and to payments to any creditors. Where an insolvency practitioner is appointed trustee in bankruptcy, the official receiver retains the duty to investigate the bankrupt's affairs.

Certain restrictions and duties are imposed on a bankrupt. These include not acting as a director of a company and not raising credit without informing the person from whom they are borrowing that s/he is a bankrupt. A bankrupt has the right to appeal against their bankruptcy on a point of law.

A first-time bankrupt in England and Wales can usually have their bankruptcy discharged after 12 months, at which point they cease to be liable for their bankruptcy debts. However, in cases where the bankrupt is considered culpable for his or her insolvency, a bankruptcy restrictions order may be made to extend some of the restrictions of bankruptcy for up to 15 years.

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