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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
Re Rodus Developments Ltd (in administration); Bushby and another (as joint administrators of Rodus Developments Ltd) v Actua Investment LLC [2022] EWHC 3232 (Ch) (12 January 2023)
The importance for an equitable charge to be registered - The decision by ICC Judge Barber in this case illustrates why it is crucial for an equitable charge to be registered for it be enforceable. View
The importance for an equitable charge to be registered - The decision by ICC Judge Barber in this case illustrates why it is crucial for an equitable charge to be registered for it be enforceable. View
Croxen and others v Gas and Electricity Markets Authority and others (11 November 2022)
The Chancery Division made various rulings, following an application for directions made by five sets of joint administrators and five other cases involving joint liquidators (together, the officeholders). The officeholders had been companies that had formerly been licensed to supply electricity and gas to domestic customers in the UK. Each had had its licence revoked following a determination by a court that it was unable to pay its debts. View
The Chancery Division made various rulings, following an application for directions made by five sets of joint administrators and five other cases involving joint liquidators (together, the officeholders). The officeholders had been companies that had formerly been licensed to supply electricity and gas to domestic customers in the UK. Each had had its licence revoked following a determination by a court that it was unable to pay its debts. View
East-West Logistics LLP v Melars Group Ltd (28 October 2022)
The Court of Appeal, Civil Division, dismissed the appellant petitioner's appeal against the Chancery Division's decision to dismiss its winding up petition on the grounds that it had failed to rebut the presumption that Malta, rather than the UK, had been the respondent company's centre of main interest (COMI) for the purpose of art 3(1) of Council Regulation (EC) No 2015/848. The court held that: (i) the Chancery Division had correctly concluded that the lower court judge had erred when he had conducted a comparison of the factors which had pointed to various countries without starting from the presumption that the respondent's COMI had been Malta; (ii) factors which related to a fraud which had been deliberately concealed from third parties, and which had only became apparent as a result of subsequent investigations by the relevant authorities, had not been relevant as they had not been ascertainable by third parties; (iii) while the contractual terms upon which the appellant had dealt with the respondent would not have been known to third parties, they should not be excluded from the consideration: and (iv) the fact that the company had entered into a number of international commercial contracts, which had been in English and governed by English Law, said nothing about where the respondent had conducted the administration of its interests on a regular basis. View
The Court of Appeal, Civil Division, dismissed the appellant petitioner's appeal against the Chancery Division's decision to dismiss its winding up petition on the grounds that it had failed to rebut the presumption that Malta, rather than the UK, had been the respondent company's centre of main interest (COMI) for the purpose of art 3(1) of Council Regulation (EC) No 2015/848. The court held that: (i) the Chancery Division had correctly concluded that the lower court judge had erred when he had conducted a comparison of the factors which had pointed to various countries without starting from the presumption that the respondent's COMI had been Malta; (ii) factors which related to a fraud which had been deliberately concealed from third parties, and which had only became apparent as a result of subsequent investigations by the relevant authorities, had not been relevant as they had not been ascertainable by third parties; (iii) while the contractual terms upon which the appellant had dealt with the respondent would not have been known to third parties, they should not be excluded from the consideration: and (iv) the fact that the company had entered into a number of international commercial contracts, which had been in English and governed by English Law, said nothing about where the respondent had conducted the administration of its interests on a regular basis. View
Kireeva (as bankruptcy trustee of Georgy Bedzhamov) v Bedzhamov (27 October 2022)
The Chancery Division ruled on the application for common law recognition brought by the applicant, a trustee, against the respondent, the bankrupt. The applicant, an insolvency practitioner, had been appointed for the purpose of realising and liquidating the respondent's assets (the bankruptcy order). The trustee's position was that the effect of the bankruptcy order was that all of the respondent's assets worldwide was vested in her automatically under Russian law. It was alleged that the respondent had granted a guarantee in favour of a Russian bank, VTB, to support a loan facility given to his sister, in the sum of 320.441m Russian roubles (equivalent to around US $5m). The respondent had failed to pay the amount and accordingly, a bankruptcy judgment was issued against him. The respondent had argued that the VTB bankruptcy judgment was procured by fraud and that the guarantee was a forgery. The court held, among other things, that it had been shown that the respondent had not established that the guarantee was a forgery and that the VTB bankruptcy judgment was procured by fraud. Hence, recognition of the respondent's Russian bankruptcy should not be denied. View
The Chancery Division ruled on the application for common law recognition brought by the applicant, a trustee, against the respondent, the bankrupt. The applicant, an insolvency practitioner, had been appointed for the purpose of realising and liquidating the respondent's assets (the bankruptcy order). The trustee's position was that the effect of the bankruptcy order was that all of the respondent's assets worldwide was vested in her automatically under Russian law. It was alleged that the respondent had granted a guarantee in favour of a Russian bank, VTB, to support a loan facility given to his sister, in the sum of 320.441m Russian roubles (equivalent to around US $5m). The respondent had failed to pay the amount and accordingly, a bankruptcy judgment was issued against him. The respondent had argued that the VTB bankruptcy judgment was procured by fraud and that the guarantee was a forgery. The court held, among other things, that it had been shown that the respondent had not established that the guarantee was a forgery and that the VTB bankruptcy judgment was procured by fraud. Hence, recognition of the respondent's Russian bankruptcy should not be denied. View
Re Radeva (in bankruptcy) (24 October 2022)
The Chancery Division allowed the applicant's application to set aside a bankruptcy order relating to the second respondent (R). The court held that, at the relevant time, R's COMI had been in Bulgaria and not in England and Wales. Therefore, the bankruptcy order would be set aside as of right. View
The Chancery Division allowed the applicant's application to set aside a bankruptcy order relating to the second respondent (R). The court held that, at the relevant time, R's COMI had been in Bulgaria and not in England and Wales. Therefore, the bankruptcy order would be set aside as of right. View
Henderson Jones Ltd v Ross and others (12 October 2022)
The Chancery Division dismissed the claimant's claim against the defendants. The claimant sought an order that the fifth defendant bank produce all documents and answer the claimant's request for further information (RFI). The claim concerned a restructure of the Hospital Medical Group Limited. The company was placed into creditors' voluntary liquidation and the fifth defendant was the company's bank and held security over its assets, including a legal charge over property affected by the restructure. The claimant (as assignee of the company's relevant claims) alleged that: (i) the transactions executed as part of the restructure were unlawful distributions and transactions at an undervalue intended to defraud creditors; (ii) the first to third defendants had acted in breach of fiduciary and other duties; and (iii) the fifth defendant had assisted in the breach of those duties. The fifth defendant denied the allegations of dishonest assistance. The court held, among other things, that to disclose privileged information concerning the contents of the fifth defendant's advice from Eversheds was privileged. Having found that such privilege had not been waived, it was not open for the court to use CPR Part 18 to circumvent it. Hence, the claimant's RFI application was rejected. View
The Chancery Division dismissed the claimant's claim against the defendants. The claimant sought an order that the fifth defendant bank produce all documents and answer the claimant's request for further information (RFI). The claim concerned a restructure of the Hospital Medical Group Limited. The company was placed into creditors' voluntary liquidation and the fifth defendant was the company's bank and held security over its assets, including a legal charge over property affected by the restructure. The claimant (as assignee of the company's relevant claims) alleged that: (i) the transactions executed as part of the restructure were unlawful distributions and transactions at an undervalue intended to defraud creditors; (ii) the first to third defendants had acted in breach of fiduciary and other duties; and (iii) the fifth defendant had assisted in the breach of those duties. The fifth defendant denied the allegations of dishonest assistance. The court held, among other things, that to disclose privileged information concerning the contents of the fifth defendant's advice from Eversheds was privileged. Having found that such privilege had not been waived, it was not open for the court to use CPR Part 18 to circumvent it. Hence, the claimant's RFI application was rejected. View
Re Bitumina Industries Ltd (in administration) (12 October 2022)
The Chancery Division ruled on an application made by the joint administrators of Bitumina Industries Ltd (the company) for directions as to the validity and enforceability of a charge given to the second respondent by the company in January 2020. The court held that the charge had been a validly created security, and it was effective against the joint administrators. The charge had not been invalidated by s 245(2)(a) of the Insolvency Act 1986 at the date of its creation, and was valid to the extent of the value derived by the company from its acquisition of the shares of another company. View
The Chancery Division ruled on an application made by the joint administrators of Bitumina Industries Ltd (the company) for directions as to the validity and enforceability of a charge given to the second respondent by the company in January 2020. The court held that the charge had been a validly created security, and it was effective against the joint administrators. The charge had not been invalidated by s 245(2)(a) of the Insolvency Act 1986 at the date of its creation, and was valid to the extent of the value derived by the company from its acquisition of the shares of another company. View
Re Lehman Brothers International (Europe) (in administration) (11 October 2022)
The Chancery Division made rulings in proceedings concerning the administration of Lehman Brothers International (Europe), following an application for directions made by the applicant administrators. The application concerned the construction and effect of various standard form events of default provisions which had been included in the 1992 and 2002 versions of the ISDA master agreements. View
The Chancery Division made rulings in proceedings concerning the administration of Lehman Brothers International (Europe), following an application for directions made by the applicant administrators. The application concerned the construction and effect of various standard form events of default provisions which had been included in the 1992 and 2002 versions of the ISDA master agreements. View
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