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Re AFM (1932) Ltd (in liquidation) AFM (1932) Ltd (in liquidation) and others v Belisco Estates Ltd and another (21 December 2022)
The Chancery Division (Companies Court) found that the liquidator's application under s 238 of the Insolvency Act 1986 (IA 1986), alleging a transaction at an undervalue, could not succeed. The s 238 claim referred to the benefit gained by the first respondent company of having the first applicant (in liquidation) pay for work and supplies for a property, without reimbursement. Although the arrangement had fallen within the statutory definition of 'transaction' in IA 1986 s 436(1), the transaction was only at an undervalue if the first applicant was not to be reimbursed for the payments. The issue for the claim was that the first applicant was entitled to be reimbursed. The real problem was the first respondent's breach of its obligation to reimburse rather than the arrangement being a transaction at an undervalue. View
The Chancery Division (Companies Court) found that the liquidator's application under s 238 of the Insolvency Act 1986 (IA 1986), alleging a transaction at an undervalue, could not succeed. The s 238 claim referred to the benefit gained by the first respondent company of having the first applicant (in liquidation) pay for work and supplies for a property, without reimbursement. Although the arrangement had fallen within the statutory definition of 'transaction' in IA 1986 s 436(1), the transaction was only at an undervalue if the first applicant was not to be reimbursed for the payments. The issue for the claim was that the first applicant was entitled to be reimbursed. The real problem was the first respondent's breach of its obligation to reimburse rather than the arrangement being a transaction at an undervalue. View
Hull v Liddiment and another (17 December 2022)
The Business and Property Courts, dismissing the appellant freeholder owner's appeal, held that the Deputy Master had not erred in refusing to grant an adjournment and ordering possession of the land pursuant to s 36 of the Administration of Justice Act 1970. View
The Business and Property Courts, dismissing the appellant freeholder owner's appeal, held that the Deputy Master had not erred in refusing to grant an adjournment and ordering possession of the land pursuant to s 36 of the Administration of Justice Act 1970. View
McLinden v Lu (26 November 2021)
The Chancery Division, ruling on preliminary issues, held, among other things, that a petition presented by the defendant against an individual (K) had not been defective and that there had not been any material non-compliance with s 269(1)(b) of the Insolvency Act 1986. The preliminary issues arose in circumstances ... View
The Chancery Division, ruling on preliminary issues, held, among other things, that a petition presented by the defendant against an individual (K) had not been defective and that there had not been any material non-compliance with s 269(1)(b) of the Insolvency Act 1986. The preliminary issues arose in circumstances ... View
Williams v Nilsson and another (25 November 2021)
The Administrative Court granted the appellant's applications for permission: (i) to appeal against the judge's decision to grant the respondents, who were her bankrupt ex-husband's trustees in bankruptcy, orders for possession and sale of the property she had owned with the bankrupt in order to realise the bankrupt's 50% interest in the property; and (ii) to rely upon new evidence (in the form of a transcript of a financial remedy hearing the appellant and the bankrupt) in support of that appeal. The court held that on balance, there had been an agreement made between the appellant and the bankrupt that any appreciation in the value of the property after he had moved out and before the property had been sold would belong to the appellant. In making that finding, significant weight was attached to the transcript which fully corroborated the appellant's claim of such an agreement being made. View
The Administrative Court granted the appellant's applications for permission: (i) to appeal against the judge's decision to grant the respondents, who were her bankrupt ex-husband's trustees in bankruptcy, orders for possession and sale of the property she had owned with the bankrupt in order to realise the bankrupt's 50% interest in the property; and (ii) to rely upon new evidence (in the form of a transcript of a financial remedy hearing the appellant and the bankrupt) in support of that appeal. The court held that on balance, there had been an agreement made between the appellant and the bankrupt that any appreciation in the value of the property after he had moved out and before the property had been sold would belong to the appellant. In making that finding, significant weight was attached to the transcript which fully corroborated the appellant's claim of such an agreement being made. View
Walker v Official Receiver (as trustee in bankruptcy of Martin Walker) (26 October 2021)
The Chancery Division granted the appellant leave to bring an application for compensation from the respondent Official Receiver pursuant to s 304 of the Insolvency Act 1986. Following the appellant's bankruptcy, the Official Receiver had sold land in which the appellant had a one-third beneficial interest, which it had no authority to sell as the legal title in the land had remained vested in the appellant as trustee of the land. Accordingly, the Chancery Division concluded the appellant had a reasonably meritorious claim for compensation from the Official Receiver. View
The Chancery Division granted the appellant leave to bring an application for compensation from the respondent Official Receiver pursuant to s 304 of the Insolvency Act 1986. Following the appellant's bankruptcy, the Official Receiver had sold land in which the appellant had a one-third beneficial interest, which it had no authority to sell as the legal title in the land had remained vested in the appellant as trustee of the land. Accordingly, the Chancery Division concluded the appellant had a reasonably meritorious claim for compensation from the Official Receiver. View
Re Amicus Finance plc (in administration) (15 November 2021)
The Chancery Division approved a scheme of arrangement concerning Amicus Finance plc, which was in liquidation. The core business of Amicus was the provision of short-term property finance. It also offered other secured corporate and development finance and, through its subsidiaries, also operated in specialist fields, including asset finance. The court held that the criteria for sanctioning the scheme had been met, and that it was appropriate for it to use its discretion to sanction the scheme. View
The Chancery Division approved a scheme of arrangement concerning Amicus Finance plc, which was in liquidation. The core business of Amicus was the provision of short-term property finance. It also offered other secured corporate and development finance and, through its subsidiaries, also operated in specialist fields, including asset finance. The court held that the criteria for sanctioning the scheme had been met, and that it was appropriate for it to use its discretion to sanction the scheme. View
Re A Company (Preliminary Hearing Under Schedule 10 to the Corporate Insolvency and Governance Act 2020) (11 November 2021)
The Chancery Division dismissed the petitioner's petition to wind up the respondent company. The proceedings arose from a development project which the petitioner had funded, which had stalled during the lockdown during the coronavirus pandemic. The court held that it was more likely than not that, but for the pandemic, the company would have been in a position to refinance the project and repay the debt owed to the petitioner. As a result, the company had passed the threshold test in para 5(1) of sch 10 to the Corporate Insolvency and Governance Act 2020. View
The Chancery Division dismissed the petitioner's petition to wind up the respondent company. The proceedings arose from a development project which the petitioner had funded, which had stalled during the lockdown during the coronavirus pandemic. The court held that it was more likely than not that, but for the pandemic, the company would have been in a position to refinance the project and repay the debt owed to the petitioner. As a result, the company had passed the threshold test in para 5(1) of sch 10 to the Corporate Insolvency and Governance Act 2020. View
Re Dealmaster Ltd Richmondshire District Council v Dealmaster Ltd and another (1 November 2021)
The Business and Property Courts, dismissed the application of the creditor. The creditor had sought the revocation or suspension of approval of a creditors' voluntary arrangement in respect of the first respondent company on the basis that a different valuation of the relevant property owned by the company should have been taken into account. The court held that the applicant would not have been in a significantly better position in a liquidation as claimed, nor had it been subject to unfair prejudice as a result of the CVA. View
The Business and Property Courts, dismissed the application of the creditor. The creditor had sought the revocation or suspension of approval of a creditors' voluntary arrangement in respect of the first respondent company on the basis that a different valuation of the relevant property owned by the company should have been taken into account. The court held that the applicant would not have been in a significantly better position in a liquidation as claimed, nor had it been subject to unfair prejudice as a result of the CVA. View
Hughes and another v Howell (6 July 2021)
The Court of Appeal, Civil Division, dismissed the appellant debtor's appeal from a bankruptcy order on the ground that the appellant had not made an offer to provide security over the debt that was sufficient to show that the respondent creditors' refusal of that offer had been unreasonable because a creditor was not unreasonable in refusing to wait for an indeterminate time for an indeterminate amount before the security over the debt could be realised. View
The Court of Appeal, Civil Division, dismissed the appellant debtor's appeal from a bankruptcy order on the ground that the appellant had not made an offer to provide security over the debt that was sufficient to show that the respondent creditors' refusal of that offer had been unreasonable because a creditor was not unreasonable in refusing to wait for an indeterminate time for an indeterminate amount before the security over the debt could be realised. View
Re Inter Global Surgical LLP No. OC371890 Frandsen and others v Mulligan and others (1 October 2021)
The Chancery Division made two orders in the course of proceedings concerning an application to restore a company to the Register of Companies pursuant to s 1029(1) of the Companies Act 2006. First, the court declined to order the restoration of the company's name to the Register. The court could not dispense with issue and service of a claim form on the Registrar of Companies and make a final order disposing of the proceedings before they were issued. Second, in the circumstances, it was just and convenient to appoint receivers on an interim basis. Damages would not be an adequate remedy for either party and, by appointing receivers, their legitimate interests would be protected View
The Chancery Division made two orders in the course of proceedings concerning an application to restore a company to the Register of Companies pursuant to s 1029(1) of the Companies Act 2006. First, the court declined to order the restoration of the company's name to the Register. The court could not dispense with issue and service of a claim form on the Registrar of Companies and make a final order disposing of the proceedings before they were issued. Second, in the circumstances, it was just and convenient to appoint receivers on an interim basis. Damages would not be an adequate remedy for either party and, by appointing receivers, their legitimate interests would be protected View
Re an application for directions by Golden Belt 1 Sukuk Company BSC (c) (in liqui-dation) (as trustee) and another company (30 September 2021)
The Chancery Division held that limitations imposed by sch 3 to a declaration of trust and agency (DTA) on the power of certificate holders to pass resolutions – in particular the limitation that a particular majority was required in order to pass a resolution in relation to reserved matters – did not result in an implied limitation on the trustee's or delegate's powers, trusts, authorities and discretions vested in them by the DTA, in the context of an Islamic financing transaction (the sukuk). The sukuk had an economic effect equivalent to a bond issue, but was structured so as to conform to the principles of sharia law: in particular, the principle that prohibited charging or paying interest. View
The Chancery Division held that limitations imposed by sch 3 to a declaration of trust and agency (DTA) on the power of certificate holders to pass resolutions – in particular the limitation that a particular majority was required in order to pass a resolution in relation to reserved matters – did not result in an implied limitation on the trustee's or delegate's powers, trusts, authorities and discretions vested in them by the DTA, in the context of an Islamic financing transaction (the sukuk). The sukuk had an economic effect equivalent to a bond issue, but was structured so as to conform to the principles of sharia law: in particular, the principle that prohibited charging or paying interest. View
Re Nero Holdings Ltd Young v Nero Holdings Ltd and others (29 September 2021)
The applicant landlord creditor of Nero Holdings Ltd challenged the company voluntary arrangement approved by a creditors' electronic decision procedure on the grounds that a late offer under which landlords would have received their rent arrears in full had been erroneously rejected amounting to a procedural irregularity. The Business and Property Courts, dismissing the application, held that, balancing all the relevant factors and the risks involved, under considerable time pressure and without any clear route for postponing an electronic voting procedure, the conclusion that the nominees had reached was well within the range of what a reasonable nominee could have come to in the circumstances. View
The applicant landlord creditor of Nero Holdings Ltd challenged the company voluntary arrangement approved by a creditors' electronic decision procedure on the grounds that a late offer under which landlords would have received their rent arrears in full had been erroneously rejected amounting to a procedural irregularity. The Business and Property Courts, dismissing the application, held that, balancing all the relevant factors and the risks involved, under considerable time pressure and without any clear route for postponing an electronic voting procedure, the conclusion that the nominees had reached was well within the range of what a reasonable nominee could have come to in the circumstances. View
Re Rhino Enterprises Properties Ltd and another; Schofield and another v Smith and another (22 September 2021)
The Chancery Division ruled on two sets of proceedings, namely: (i) misfeasance proceedings against the first applicant company's former administrators (the respondents) and a claim against Clyde & Co (the C&C claim). In the misfeasance proceedings, the court granted the application by the respondents to strike out the proceedings or grant summary judgment in favour of their favour on the basis that a previous settlement agreement entered into by companies associated with the applicants and Barclays Bank plc had released the former administrators from the claims asserted against them. The court further held that there would either be a striking out and/or summary judgment in favour of C&C as a trial would be necessary to determine whether the alleged breaches asserted against C&C for breach of duty while acting as agents fell within an overall appointment of C&C as 'agents' or not, or were otherwise prevented by the settlement agreement on the facts. View
The Chancery Division ruled on two sets of proceedings, namely: (i) misfeasance proceedings against the first applicant company's former administrators (the respondents) and a claim against Clyde & Co (the C&C claim). In the misfeasance proceedings, the court granted the application by the respondents to strike out the proceedings or grant summary judgment in favour of their favour on the basis that a previous settlement agreement entered into by companies associated with the applicants and Barclays Bank plc had released the former administrators from the claims asserted against them. The court further held that there would either be a striking out and/or summary judgment in favour of C&C as a trial would be necessary to determine whether the alleged breaches asserted against C&C for breach of duty while acting as agents fell within an overall appointment of C&C as 'agents' or not, or were otherwise prevented by the settlement agreement on the facts. View
Serene Construction Ltd v Salata and Associates Ltd (formerly Salata & Co Ltd) and others (2 September 2021)
The claimant company unsuccessfully claimed damages, alleging that the second and third defendant receivers' sale of an unbuilt development site, which had been subject to a fixed charge, had been made in breach of their fiduciary duty to take reasonable steps to achieve the best price available. The Chancery Division, applying settled law, ruled, among other things, that it had not been a breach of duty the receivers to have adopted the marketing strategy that they had, and that, having received an offer of £175,000, it had not been a breach of duty to have accepted that, in the circumstances as had been known to them at the time. View
The claimant company unsuccessfully claimed damages, alleging that the second and third defendant receivers' sale of an unbuilt development site, which had been subject to a fixed charge, had been made in breach of their fiduciary duty to take reasonable steps to achieve the best price available. The Chancery Division, applying settled law, ruled, among other things, that it had not been a breach of duty the receivers to have adopted the marketing strategy that they had, and that, having received an offer of £175,000, it had not been a breach of duty to have accepted that, in the circumstances as had been known to them at the time. View
Axnoller Events Ltd v Brake and another; Brake and others v Chedington Court Estate Ltd (17 August 2021)
The Chancery Division made rulings on two applications in proceedings concerning a property dispute. The court held that the applicants had not been 'unfairly prejudiced' by a moratorium that one of the parties had entered under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, SI 2021/1311. The application to cancel the moratorium would be refused. Further, the applicants' case for an 'unless' order in relation to two earlier costs orders had not been made out, but the case for an 'unless' order regarding to later orders had. View
The Chancery Division made rulings on two applications in proceedings concerning a property dispute. The court held that the applicants had not been 'unfairly prejudiced' by a moratorium that one of the parties had entered under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, SI 2021/1311. The application to cancel the moratorium would be refused. Further, the applicants' case for an 'unless' order in relation to two earlier costs orders had not been made out, but the case for an 'unless' order regarding to later orders had. View
Absolute Living Developments Ltd (in liquidation) (acting by its liquidator, Louise Mary Brittain) v DS7 Ltd and others (29 June 2021)
The applicant applied for an interim injunction seeking to restrain the first respondent insolvent company and its liquidator from selling properties of the company. The Business and Property Court, dismissing the application, held that, at the stage of an interim injunction, the applicant had failed to establish an arguable case that the sale of the properties was as a result of misconduct. View
The applicant applied for an interim injunction seeking to restrain the first respondent insolvent company and its liquidator from selling properties of the company. The Business and Property Court, dismissing the application, held that, at the stage of an interim injunction, the applicant had failed to establish an arguable case that the sale of the properties was as a result of misconduct. View
Galer v Mond (administrator of SFPL Ltd) and another (15 January 2021)
The applicant, the company's sole director and sole shareholder, failed in his application for an order declaring invalid the appointment of an administrator of that company. The Administrative Court held, among other things, that on the evidence, any allegation that the administrator's appointment would not be in accordance with the statutory purposes of administration, or that there would be any risk of a lack of independence, ought to be and was rejected out of hand. View
The applicant, the company's sole director and sole shareholder, failed in his application for an order declaring invalid the appointment of an administrator of that company. The Administrative Court held, among other things, that on the evidence, any allegation that the administrator's appointment would not be in accordance with the statutory purposes of administration, or that there would be any risk of a lack of independence, ought to be and was rejected out of hand. View
Re A company A v B (11 August 2021)
The applicant petitioning creditor's application for a winding up petition regarding the respondent debtor company failed. The Chancery Division held that the debtor company had demonstrated a prima facie case that there had been a financial effect on the debtor company. The financial effect of the coronavirus pandemic on the debtor company was inextricably linked to its inability to pay the judgment debt. Having made that finding, it followed that the petition had to be dismissed. View
The applicant petitioning creditor's application for a winding up petition regarding the respondent debtor company failed. The Chancery Division held that the debtor company had demonstrated a prima facie case that there had been a financial effect on the debtor company. The financial effect of the coronavirus pandemic on the debtor company was inextricably linked to its inability to pay the judgment debt. Having made that finding, it followed that the petition had to be dismissed. View
Re Amicus Finance plc (in administration) (9 August 2021)
The applicant companies succeeded in their application for an order convening meetings of creditors to consider and, if thought fit, approve a restructuring plan in respect of a related finance company that was in administration. The Chancery Division held that, among other things, the threshold conditions under s 901A of the Companies Act 2006 for proposing a compromise or arrangement were satisfied. View
The applicant companies succeeded in their application for an order convening meetings of creditors to consider and, if thought fit, approve a restructuring plan in respect of a related finance company that was in administration. The Chancery Division held that, among other things, the threshold conditions under s 901A of the Companies Act 2006 for proposing a compromise or arrangement were satisfied. View
Primeo Fund (in official liquidation) v Bank of Bermuda (Cayman) Ltd and another (Cayman Islands) (9 August 2021)
The appellant (Primeo), a Cayman Islands company in official liquidation which carried on business as an open-ended mutual investment fund, successfully appealed in relation to losses suffered as a result of the fraudulent Ponzi scheme operated by Bernard Madoff, through his company (BLMIS) from the respondents, who Primeo contended had breached their duties as it's administrator and custodian. The Privy Council held that the transfer to another company of Primeo's rights in the BLMIS investments had not had the effect of removing Primeo's rights to claim against the respondents in respect of its investments in BLMIS. Further, the Court of Appeal had erred in holding that the common wrongdoer requirement was satisfied in relation to the respondents: the reflective loss rule only applied to exclude a claim by a shareholder where what was in issue was a wrong committed by a person who was a wrongdoer both as against the shareholder and as against the company. View
The appellant (Primeo), a Cayman Islands company in official liquidation which carried on business as an open-ended mutual investment fund, successfully appealed in relation to losses suffered as a result of the fraudulent Ponzi scheme operated by Bernard Madoff, through his company (BLMIS) from the respondents, who Primeo contended had breached their duties as it's administrator and custodian. The Privy Council held that the transfer to another company of Primeo's rights in the BLMIS investments had not had the effect of removing Primeo's rights to claim against the respondents in respect of its investments in BLMIS. Further, the Court of Appeal had erred in holding that the common wrongdoer requirement was satisfied in relation to the respondents: the reflective loss rule only applied to exclude a claim by a shareholder where what was in issue was a wrong committed by a person who was a wrongdoer both as against the shareholder and as against the company. View
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