Legal case taken against FM Models Agency Ltd

On 6 January 2017 the agency, FM Model Agency Ltd trading as a FM London Model Management - In Liquidation ("FMMA"), went into voluntary liquidation owing large sums of money to models that it had represented. It soon transpired that those running FMMA had failed to keep all models' money received from employers separate from company money or to keep adequate records of its dealings with models' money. Furthermore, there was a risk that models' fees still owed by employers after FMMA had gone into liquidation might be treated as part of the funds to be distributed to FMMA's creditors generally rather than being ring-fenced as money held on trust for the models.

Equity therefore took up the matter on behalf its members represented by FMMA by making representations to liquidators, Mazars LLP, to ensure that money that could identified as models' money should be held as trust money for the models. This has entailed extensive engagement by the union in the liquidation process and required Equity become a party in an application to the High Court made by the liquidators for a court order to determine how money held by FMMA and the liquidators should be distributed, and to provide for how the liquidators' costs should be paid. Equity also made a complaint about the conduct of those running FMMA to the Employment Agencies Standards Inspectorate, the outcome of which is still awaited.

After almost 12 months of legal proceedings, on 10 May 2019, the High Court made an order concerning how the money that had been received by the company at the time it went into liquidation, and subsequently received by the liquidators, should be distributed. It also provides for how the liquidator's costs and the costs of dealing with trust money should be paid. The court accepted the main arguments that Equity's legal representatives had advanced in the court action resulting in the most favourable outcome that could be expected in the circumstances. The court order and the accompanying judgment of Companies Court Judge Jones can be seen here:

Court order

Judgement  

Making a claim
As a result of the court order, those models who have yet to make claims to the liquidators for the fees owing to them, must now do so by 4pm 28 June 2019. This is a notice addressed to such models that the liquidators have publicised along with the Proof of Debt form that would have to be submitted when making a claim with all supporting documents. The Proof of Debt form can be found here. If those making a claim would like to contact the union about the matter, they should email Martin Kenny at Equity on mkenny@equity.org.uk