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Re Mittal (a bankrupt) (24 April 2023)
The Chancery Division allowed the appellant trustee's appeal against an order striking out the trustee's application to suspend the discharge from bankruptcy of the respondent (M). An order would be made in the form originally sought at the substantive hearing before the judge, subject to certain appropriate conditions. View
The Chancery Division allowed the appellant trustee's appeal against an order striking out the trustee's application to suspend the discharge from bankruptcy of the respondent (M). An order would be made in the form originally sought at the substantive hearing before the judge, subject to certain appropriate conditions. View
Hunt (as provisional liquidator of Black Capital) v Ubhi (19 April 2023)
The Court of Appeal, Civil Division, allowing the appeal against a decision continuing a freezing injunction against the appellant granted in favour of the respondent provisional liquidator, held that the judge had erred by not keeping in mind the need for the respondent to justify a departure from the default position that an applicant for an interim freezing injunction had to give an unlimited cross-undertaking in damages. View
The Court of Appeal, Civil Division, allowing the appeal against a decision continuing a freezing injunction against the appellant granted in favour of the respondent provisional liquidator, held that the judge had erred by not keeping in mind the need for the respondent to justify a departure from the default position that an applicant for an interim freezing injunction had to give an unlimited cross-undertaking in damages. View
Re Hussain a bankrupt (10 March 2023)
The Chancery Division stayed an application by the joint trustees in bankruptcy of Mr H, in which they applied for the sale of the family home of Mr and Mrs H for the purposes of the bankruptcy, as 50% beneficial owners. The court held that the trustees had not proved on the balance of probability that the transaction had been at an undervalue. Mrs H's oral evidence that there had been an agreement at the date of the letter resulting in good consideration for the release could not be rejected. View
The Chancery Division stayed an application by the joint trustees in bankruptcy of Mr H, in which they applied for the sale of the family home of Mr and Mrs H for the purposes of the bankruptcy, as 50% beneficial owners. The court held that the trustees had not proved on the balance of probability that the transaction had been at an undervalue. Mrs H's oral evidence that there had been an agreement at the date of the letter resulting in good consideration for the release could not be rejected. View
Re Central Properties Holdings Ltd (in administration) (14 April 2023)
The Chancery Division declined to make an order providing for the discharge from liability of the administrators of a company, conditional upon the termination of the administration on successful completion of the company's Company Voluntary Arrangement (CVA). The relief sought formed part of an application in which the administrators had sought an extension of their term of office and was said to be aimed at avoiding the costs of having to later bring a further application for an order to end the administration. The court was therefore invited to make a prospective conditional order providing for the administration to terminate automatically... View
The Chancery Division declined to make an order providing for the discharge from liability of the administrators of a company, conditional upon the termination of the administration on successful completion of the company's Company Voluntary Arrangement (CVA). The relief sought formed part of an application in which the administrators had sought an extension of their term of office and was said to be aimed at avoiding the costs of having to later bring a further application for an order to end the administration. The court was therefore invited to make a prospective conditional order providing for the administration to terminate automatically... View
Re JD Group Ltd in liquidation (JD Group); Bhatia v Purkiss (as liquidator of JD Group Ltd) (3 April 2023)
The Chancery Division dismissed the appellant's appeal against a finding of the deputy judge that the appellant had been a knowing party to the carrying on of the business of the company with intent to defraud a creditor by causing it to participate in a Missing Trader Intra Community (MTIC) VAT fraud transaction, and was liable to contribute to the company's assets, pursuant to s 213 of the Insolvency Act 1986. The judge also found that the participation in the fraud during that period, and the submission of a VAT return for that period claiming VAT input credits, had been a fraudulent breach of his duty. The court held that, among other things, the appeal sought to overturn an evaluative decision of the judge reached on the basis of unappealed (and unappealable) findings of primary fact, and the appellant had not brought himself within any of the established mechanisms for succeeding in such a challenge. View
The Chancery Division dismissed the appellant's appeal against a finding of the deputy judge that the appellant had been a knowing party to the carrying on of the business of the company with intent to defraud a creditor by causing it to participate in a Missing Trader Intra Community (MTIC) VAT fraud transaction, and was liable to contribute to the company's assets, pursuant to s 213 of the Insolvency Act 1986. The judge also found that the participation in the fraud during that period, and the submission of a VAT return for that period claiming VAT input credits, had been a fraudulent breach of his duty. The court held that, among other things, the appeal sought to overturn an evaluative decision of the judge reached on the basis of unappealed (and unappealable) findings of primary fact, and the appellant had not brought himself within any of the established mechanisms for succeeding in such a challenge. View
Carton-Kelly (as liquidator of CGL Realisations Ltd) v Darty Holdings SAS (3 April 2023)
The Chancery Division made orders in proceedings arising from the liquidation of the Comet Group. The court had ordered that certain payments had constituted an unlawful preference. In the present proceedings, the court held that a portion of the judgment sum paid into court pursuant to an order dated 19 December 2022 was to be paid out. Further, the court held that no non-party would be allowed to view the JPI policy in the court file without order of the court, such order only to be made on application with notice to the parties. View
The Chancery Division made orders in proceedings arising from the liquidation of the Comet Group. The court had ordered that certain payments had constituted an unlawful preference. In the present proceedings, the court held that a portion of the judgment sum paid into court pursuant to an order dated 19 December 2022 was to be paid out. Further, the court held that no non-party would be allowed to view the JPI policy in the court file without order of the court, such order only to be made on application with notice to the parties. View
Kayes v Lees (31 March 2023)
The King's Bench Division ruled that a creditor did not have a legitimate right to proceed with enforcement of a judgment without having to face the risk that the debtor would seek, and might be granted, a moratorium because such an order would seek to constrain the rights of the debtor, as given to him or her by Parliament under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, SI 2020/1311 (the Regulations), in a way that was not permitted by the Regulations. Accordingly, the court dismissed the applicant creditor's application to extend the period of an injunction granted to restrain the respondent debtor from making an application to a debt advisor for a mental health crisis moratorium... View
The King's Bench Division ruled that a creditor did not have a legitimate right to proceed with enforcement of a judgment without having to face the risk that the debtor would seek, and might be granted, a moratorium because such an order would seek to constrain the rights of the debtor, as given to him or her by Parliament under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, SI 2020/1311 (the Regulations), in a way that was not permitted by the Regulations. Accordingly, the court dismissed the applicant creditor's application to extend the period of an injunction granted to restrain the respondent debtor from making an application to a debt advisor for a mental health crisis moratorium... View
Re LLoyds British Testing Ltd (in liquidation) Manolete Partners plc v White 2023 All ER (D) 47 (Mar). (16 March 2023)
The Chancery Division held that it could, and should, compel the respondent to draw down his benefits under an occupational pension scheme financed by his employer in order to satisfy an outstanding judgment debt in favour of the assignee of claims for breach of director's duties, brought following the insolvent administration and voluntary liquidation of the employer company. It was appropriate for the court to exercise its jurisdiction to make the order sought. View
The Chancery Division held that it could, and should, compel the respondent to draw down his benefits under an occupational pension scheme financed by his employer in order to satisfy an outstanding judgment debt in favour of the assignee of claims for breach of director's duties, brought following the insolvent administration and voluntary liquidation of the employer company. It was appropriate for the court to exercise its jurisdiction to make the order sought. View
Re Fastfit Station Ltd (in liquidation); Bonney and another v Barker and another 2023 All ER (D) 38 (Mar). (10 March 2023)
The Chancery Division ruled on the claim brought by the applicants, joint liquidators, against the respondents, the former director, and his company. The applicants' claim arose out of the events which led up to the company's entry into administration on 15 April 2014 and the pre-packaged sale of its business and assets to the second respondent under a sale and purchase agreement entered into on the same day. The claimants, among other things, alleged that: (i) the April payments were transactions at an undervalue... View
The Chancery Division ruled on the claim brought by the applicants, joint liquidators, against the respondents, the former director, and his company. The applicants' claim arose out of the events which led up to the company's entry into administration on 15 April 2014 and the pre-packaged sale of its business and assets to the second respondent under a sale and purchase agreement entered into on the same day. The claimants, among other things, alleged that: (i) the April payments were transactions at an undervalue... View
Re Sova Capital Ltd (company number 04621383) (in special administration) 2023 All ER (D) 24 (Mar). (2 March 2023)
The Chancery Division allowed an application by the joint special administrators (the JSAs) of a company in administration (Sova). Before the administration, Sova had provided investment brokerage services to institutional and corporate clients, mostly trading in the Russian market. The JSAs sought the permission of the court to perform, and to procure Sova to perform, two transactions with another company (Dominanta). Dominanta was one of the largest unsecured creditors of Sova. The court held that, among other things, the applications were proper ones to bring before the court, and the JSAs' decision to enter the transaction had been rational and honest. View
The Chancery Division allowed an application by the joint special administrators (the JSAs) of a company in administration (Sova). Before the administration, Sova had provided investment brokerage services to institutional and corporate clients, mostly trading in the Russian market. The JSAs sought the permission of the court to perform, and to procure Sova to perform, two transactions with another company (Dominanta). Dominanta was one of the largest unsecured creditors of Sova. The court held that, among other things, the applications were proper ones to bring before the court, and the JSAs' decision to enter the transaction had been rational and honest. View
Mitchell and others v AI Jaber and others 2023 All ER (D) 07 (Mar). (24 February 2023)
The Chancery Division heard claims brought by the liquidators of a British Virgin Islands company for breach of duty, breach of trust and negligence both pre- and post-liquidation periods and for knowing receipt and unlawful means conspiracy. The claim concerned the alleged disposal of all the assets of the company in 2009 in return for shares in another BVI company and whether the directors had backdated the transfer from 2016 to 2009 so that the transfer was made before the company became insolvent in 2011. The court found that the share transfer was backdated and awarded equitable compensation of €67m. The court declined to award damages for conspiracy as they would be the same as those for equitable compensation. The court found that a Guernsey company which had received the shares was liable to account for them as a constructive trustee. View
The Chancery Division heard claims brought by the liquidators of a British Virgin Islands company for breach of duty, breach of trust and negligence both pre- and post-liquidation periods and for knowing receipt and unlawful means conspiracy. The claim concerned the alleged disposal of all the assets of the company in 2009 in return for shares in another BVI company and whether the directors had backdated the transfer from 2016 to 2009 so that the transfer was made before the company became insolvent in 2011. The court found that the share transfer was backdated and awarded equitable compensation of €67m. The court declined to award damages for conspiracy as they would be the same as those for equitable compensation. The court found that a Guernsey company which had received the shares was liable to account for them as a constructive trustee. View
OOO Nevskoe v UAB Baltijos Saliu Industrinio Perdirbimo Centras...(11 January 2023)
The King's Bench Division granted the claimant Russian company a final third party debt order (TPDO), applying the 'first past the post' principle, in circumstances where the defendant debtor (a Lithuanian company) had failed to pay for wheat that the claimant had sold to it, and where the arbitral tribunal in Lithuania had made an award in favour of the claimant (the award). The claimant had obtained an interim TPDO after discovering that the defendant had money in a bank account held by the third party in England, where the award was recognised. Between the making of the interim TPDO and the date of hearing of the final TPDO application, a foreign court appointed administrator (the foreign administrator) applied for the recognition, in England, of the defendant's bankruptcy in Lithuania. The court held that... View
The King's Bench Division granted the claimant Russian company a final third party debt order (TPDO), applying the 'first past the post' principle, in circumstances where the defendant debtor (a Lithuanian company) had failed to pay for wheat that the claimant had sold to it, and where the arbitral tribunal in Lithuania had made an award in favour of the claimant (the award). The claimant had obtained an interim TPDO after discovering that the defendant had money in a bank account held by the third party in England, where the award was recognised. Between the making of the interim TPDO and the date of hearing of the final TPDO application, a foreign court appointed administrator (the foreign administrator) applied for the recognition, in England, of the defendant's bankruptcy in Lithuania. The court held that... View
Re Kraus (in bankruptcy) (1 February 2023)
The Chancery Division decided the costs of an application brought by the applicant as trustee in bankruptcy of the debtor pursuant to s 366 of the Insolvency Act 1986. The court held, among other things, that (i) the first respondent should be ordered to pay the trustee's costs of and occasioned by the s 366 application, including the costs of and occasioned by a joinder application, up to and including the hearing of 9 October 2018; and (ii) the third respondent should be jointly and severally liable with the first respondent for the trustee's costs of and occasioned by the joinder application, up to and including the hearing of 9 October 2018 and solely liable for the costs of and occasioned by the s 366 application from the date of his joinder as a respondent on 9 October 2018 to the date of the trustee's written election in April 2020 not to proceed further with the s 366 application. View
The Chancery Division decided the costs of an application brought by the applicant as trustee in bankruptcy of the debtor pursuant to s 366 of the Insolvency Act 1986. The court held, among other things, that (i) the first respondent should be ordered to pay the trustee's costs of and occasioned by the s 366 application, including the costs of and occasioned by a joinder application, up to and including the hearing of 9 October 2018; and (ii) the third respondent should be jointly and severally liable with the first respondent for the trustee's costs of and occasioned by the joinder application, up to and including the hearing of 9 October 2018 and solely liable for the costs of and occasioned by the s 366 application from the date of his joinder as a respondent on 9 October 2018 to the date of the trustee's written election in April 2020 not to proceed further with the s 366 application. View
Re Dolfin Financial (UK) Ltd (26 January 2023)
The Chancery Judgment held that two applications to compel the respondents to provide information in relation to their post administration remuneration charged under two periods would be dismissed. The court held that there was no jurisdiction to make an order under rule 201 of the Investment Bank Special Administration (England and Wales) Rules 2011. The applications were misconceived. View
The Chancery Judgment held that two applications to compel the respondents to provide information in relation to their post administration remuneration charged under two periods would be dismissed. The court held that there was no jurisdiction to make an order under rule 201 of the Investment Bank Special Administration (England and Wales) Rules 2011. The applications were misconceived. View
Re Torotrak plc (in liquidation) (5 January 2023)
The Chancery Division made rulings in respect of a surplus of some £304,859.20 (before deduction of costs and expenses) in the creditors' voluntary liquidation of a company. The court ruled as to, among other things, the appropriate method by which the members of the company should be traced, and to whom the liquidators could make a distribution of the surplus. View
The Chancery Division made rulings in respect of a surplus of some £304,859.20 (before deduction of costs and expenses) in the creditors' voluntary liquidation of a company. The court ruled as to, among other things, the appropriate method by which the members of the company should be traced, and to whom the liquidators could make a distribution of the surplus. View
Re CFLD (Cayman) Investment Ltd (7 December 2023)
The Chancery Division allowed the claimant company's application for sanction of a scheme of arrangement. The scheme concerned a company based in China, which had experienced difficulties following the Coronavirus pandemic. Some of the company's bond holders were likely to be affected by the financial sanctions imposed on Russia as a result of the war in Ukraine. The court held that all the requirements for sanction of the scheme were made out. It would convene a single scheme meeting to vote on whether to approve the scheme. View
The Chancery Division allowed the claimant company's application for sanction of a scheme of arrangement. The scheme concerned a company based in China, which had experienced difficulties following the Coronavirus pandemic. Some of the company's bond holders were likely to be affected by the financial sanctions imposed on Russia as a result of the war in Ukraine. The court held that all the requirements for sanction of the scheme were made out. It would convene a single scheme meeting to vote on whether to approve the scheme. View
Re Debenhams plc (in compulsory liquidation); Frasers Group plc v Official Receiver and others; Frasers Group plc v Rowley and others (15 February 2023)
The decision of Judge Sir Paul Morgan allowed the appeal of Frasers Group Plc to amend its points of claim to add an allegation that certain parties committed a criminal offence under section 164 of the Insolvency Act 1986 “Corrupt inducement affecting appointment”. View
The decision of Judge Sir Paul Morgan allowed the appeal of Frasers Group Plc to amend its points of claim to add an allegation that certain parties committed a criminal offence under section 164 of the Insolvency Act 1986 “Corrupt inducement affecting appointment”. View
Kaye v Lees (22 December 2022)
The King's Bench Division dismissed the applicant creditor's (K's) application to, among other things, cancel the respondent's (L's) mental health crisis moratorium; and to be permitted to take enforcement action (namely the possession and sale of L's leasehold interest in a ground floor flat (the property)), pursuant to reg 7(6)(c) of the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (the 2020 Regulations), SI 2020/1311. K had been awarded damages against L on K's claim, alleging nuisance and harassment. View
The King's Bench Division dismissed the applicant creditor's (K's) application to, among other things, cancel the respondent's (L's) mental health crisis moratorium; and to be permitted to take enforcement action (namely the possession and sale of L's leasehold interest in a ground floor flat (the property)), pursuant to reg 7(6)(c) of the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (the 2020 Regulations), SI 2020/1311. K had been awarded damages against L on K's claim, alleging nuisance and harassment. View
Re CargoLogicAir Ltd; Vekshin (in his capacity as the sole director of CargoLogicAir Ltd) (16 November 2022)
The Chancery Division allowed the applicant's application for an administration order regarding the company for which he was the sole director. The business of the company had been negatively affected by sanctions imposed on the ultimate majority shareholder imposed under the Russia (Sanctions) (EU Exit) Regulations 2019. The court held that the administrators were reasonably likely to achieve one or more of the statutory purposes. It was important that the administrators take immediate control of the company. The order would be made as sought. View
The Chancery Division allowed the applicant's application for an administration order regarding the company for which he was the sole director. The business of the company had been negatively affected by sanctions imposed on the ultimate majority shareholder imposed under the Russia (Sanctions) (EU Exit) Regulations 2019. The court held that the administrators were reasonably likely to achieve one or more of the statutory purposes. It was important that the administrators take immediate control of the company. The order would be made as sought. View
Re Lehman Brothers International (Europe) (in administration) and other companies [2022] EWHC 2995 (Ch) (17 January 2023)
Whilst the majority of administrators will not generally seek an extension of an administration for a period of three years, the decision of Hildyard J provides valuable reminders of the law relating to extensions. View
Whilst the majority of administrators will not generally seek an extension of an administration for a period of three years, the decision of Hildyard J provides valuable reminders of the law relating to extensions. View
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