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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
Re A Company (10 June 2022)
The Chancery Division dismissed the applicant petitioner's application for permission to appeal, in proceedings concerning a winding-up petition. The decision of the judge had concerned the Covid-19 provisions of Sch 10 to the Corporate Insolvency and Governance Act 2020 (the Schedule). The court held that there was no warrant in the wording of para 5(3) of the Schedule to conclude that it was to be applied or tested narrowly as at the date when the debt being claimed in the petition had fallen due. The appeal lacked real prospects of success and permission to appeal would be refused. View
The Chancery Division dismissed the applicant petitioner's application for permission to appeal, in proceedings concerning a winding-up petition. The decision of the judge had concerned the Covid-19 provisions of Sch 10 to the Corporate Insolvency and Governance Act 2020 (the Schedule). The court held that there was no warrant in the wording of para 5(3) of the Schedule to conclude that it was to be applied or tested narrowly as at the date when the debt being claimed in the petition had fallen due. The appeal lacked real prospects of success and permission to appeal would be refused. View
Re Hurst Allen (26 August 2022)
The Chancery Division granted a declaration that a Declaration of Trust executed by the first and second respondents in respect of property had amounted to a transaction at an undervalue and had been executed for the purpose of putting assets beyond the reach of their creditors or of otherwise prejudicing the interests of such a person for the purposes of s 423(1) and (3) of the Insolvency Act 1986. View
The Chancery Division granted a declaration that a Declaration of Trust executed by the first and second respondents in respect of property had amounted to a transaction at an undervalue and had been executed for the purpose of putting assets beyond the reach of their creditors or of otherwise prejudicing the interests of such a person for the purposes of s 423(1) and (3) of the Insolvency Act 1986. View
Re BHS Group Ltd (1) (19 August 2022)
The Chancery Division allowed the appellant's application for his renewed application for permission to appeal from a decision which had dismissed the application to strike out certain parts of the respondents' statements of case in the proceedings. The appellant relied on the grounds that the judge (i) had misdirected himself as to the issue which he had to determine on the application; (ii) he erred in law in not striking out the overarching case; (iii) he erred in law in finding that office holders were not ordinary litigants for the purposes of pleading claims; and (iv) he erred in the exercise of his discretion in refusing to strike out the alternative date claims and/or the overarching case. The court held, among other things, that the judge had discretion when he dealt with the strike out application, but the exercise of that discretion was flawed. View
The Chancery Division allowed the appellant's application for his renewed application for permission to appeal from a decision which had dismissed the application to strike out certain parts of the respondents' statements of case in the proceedings. The appellant relied on the grounds that the judge (i) had misdirected himself as to the issue which he had to determine on the application; (ii) he erred in law in not striking out the overarching case; (iii) he erred in law in finding that office holders were not ordinary litigants for the purposes of pleading claims; and (iv) he erred in the exercise of his discretion in refusing to strike out the alternative date claims and/or the overarching case. The court held, among other things, that the judge had discretion when he dealt with the strike out application, but the exercise of that discretion was flawed. View
Re Klimvest plc Duneau (17 March 2022)
The Chancery Division made an order to wind up the company. The petitioner sought an order to wind up the company under s 122(1)(g) of the Insolvency Act 1986 on the basis that it was just and equitable to wind up the company. The court held, among other things, that although the alternative grounds for seeking to wind up the company on the just and equitable ground had not been made out, the petitioner and the third respondent had made out the ground for winding up based upon loss of substratum or purpose. Further, having concluded that the petitioner had not unreasonably refused to pursue some alternative remedy, and having considered the various discretionary considerations that arose, including the allegation that the petitioner had not come to court with clean hands, the court made an order to wind up the company. View
The Chancery Division made an order to wind up the company. The petitioner sought an order to wind up the company under s 122(1)(g) of the Insolvency Act 1986 on the basis that it was just and equitable to wind up the company. The court held, among other things, that although the alternative grounds for seeking to wind up the company on the just and equitable ground had not been made out, the petitioner and the third respondent had made out the ground for winding up based upon loss of substratum or purpose. Further, having concluded that the petitioner had not unreasonably refused to pursue some alternative remedy, and having considered the various discretionary considerations that arose, including the allegation that the petitioner had not come to court with clean hands, the court made an order to wind up the company. View
Re Wotherspoon (in bankruptcy) (16 August 2022)
The Chancery Division dismissed the claim, brought by the Trustee in Bankruptcy of the respondent's husband, which alleged that s 423 of the Insolvency Act 1986 (the 1986 Act) had applied where: (i) in order to put the home beyond the reach of creditors, the respondent's husband had transferred his half of the beneficial interest in the matrimonial home to the respondent in 2008, with a restriction that he had a life-time right to prevent disposition of the property (the restriction); or (ii) the husband had released the restriction for no consideration when the home was sold in 2013. In relation to the 2008 transfer, the court held that: ... View
The Chancery Division dismissed the claim, brought by the Trustee in Bankruptcy of the respondent's husband, which alleged that s 423 of the Insolvency Act 1986 (the 1986 Act) had applied where: (i) in order to put the home beyond the reach of creditors, the respondent's husband had transferred his half of the beneficial interest in the matrimonial home to the respondent in 2008, with a restriction that he had a life-time right to prevent disposition of the property (the restriction); or (ii) the husband had released the restriction for no consideration when the home was sold in 2013. In relation to the 2008 transfer, the court held that: ... View
Oceanfill Ltd v Nuffield Health Wellbeing Ltd and another (15 August 2022)
The Chancery Division allowed the claimant company's application for summary judgment, in proceedings where the claimant had claimed for arrears said to be due from the tenant of premises under a lease. The court held that, among other things, Part 26A of the Companies Act 2006 took effect as a statutory scheme by operation of law in the same way as a Part 26 scheme of arrangement took effect. There were no other compelling reasons for the claim to be disposed of at trial and not summarily. View
The Chancery Division allowed the claimant company's application for summary judgment, in proceedings where the claimant had claimed for arrears said to be due from the tenant of premises under a lease. The court held that, among other things, Part 26A of the Companies Act 2006 took effect as a statutory scheme by operation of law in the same way as a Part 26 scheme of arrangement took effect. There were no other compelling reasons for the claim to be disposed of at trial and not summarily. View
Re De Freitas Revenue and Customs Commissioners v De Freitas (4 August 2022)
The Chancery Division, whilst refusing to dismiss the petitioning creditor's petition for the bankruptcy of the debtor because the debtor had failed to establish any of his grounds for the dismissal of the petition, held that the petition would be adjourned in order to enable the debtor to pay the petition debt in full by obtaining equity release from his assets. View
The Chancery Division, whilst refusing to dismiss the petitioning creditor's petition for the bankruptcy of the debtor because the debtor had failed to establish any of his grounds for the dismissal of the petition, held that the petition would be adjourned in order to enable the debtor to pay the petition debt in full by obtaining equity release from his assets. View
Re Houst Ltd (22 July 2022)
The Chancery Division sanctioned a restructuring plan under Pt 26A of the Companies Act 2006 in respect of a company. The company's business was the provision of property management services for short term/holiday lets. It was severely affected by the Covid-19 pandemic. It was both cash flow and balance sheet insolvent. Three creditors had threatened winding-up petitions, and the company was not in a position to pay the debts claimed by them. If the restructuring plan did not proceed, then there would most likely be an accelerated marketing process leading to a sale in administration (i.e. a pre-pack administration). The court held, among other things, that if it refused to sanction the plan, then the evidence indicated that all creditors, including HMRC, would be worse off. Therefore, the judge exercised his discretion to sanction the plan. View
The Chancery Division sanctioned a restructuring plan under Pt 26A of the Companies Act 2006 in respect of a company. The company's business was the provision of property management services for short term/holiday lets. It was severely affected by the Covid-19 pandemic. It was both cash flow and balance sheet insolvent. Three creditors had threatened winding-up petitions, and the company was not in a position to pay the debts claimed by them. If the restructuring plan did not proceed, then there would most likely be an accelerated marketing process leading to a sale in administration (i.e. a pre-pack administration). The court held, among other things, that if it refused to sanction the plan, then the evidence indicated that all creditors, including HMRC, would be worse off. Therefore, the judge exercised his discretion to sanction the plan. View
Re London Oil Gas Ltd (in administration); O'Connell and others v LPE Support Ltd (in compulsory liquidation) (20 June 2022)
he Chancery Division allowed the application, brought by the joint administrators of London Oil and Gas Ltd (LOG), to set aside an assignment by which LOG had purported to assign its rights against one of its borrowers, Atlantic Petroleum, to the respondent for consideration of £1. Among other things, the court held that the assignment had been void for want of authority given that: (i) the decision to enter into the assignment had not been taken by LOG's board of directors but merely a singular director (the director) who had no actual authority to act alone; ... View
he Chancery Division allowed the application, brought by the joint administrators of London Oil and Gas Ltd (LOG), to set aside an assignment by which LOG had purported to assign its rights against one of its borrowers, Atlantic Petroleum, to the respondent for consideration of £1. Among other things, the court held that the assignment had been void for want of authority given that: (i) the decision to enter into the assignment had not been taken by LOG's board of directors but merely a singular director (the director) who had no actual authority to act alone; ... View
Re Houst Ltd (14 June 2022)
The Chancery Division allowed the claimant company's application for an order to convene meetings in order to consider and potentially approve a restructuring plan. The company, which had been severely impacted by the coronavirus pandemic and was cashflow insolvent, had been threatened by winding-up petitions. The court held that the various requirements for the order to be made had been met, and an order would be made convening the proposed meetings. View
The Chancery Division allowed the claimant company's application for an order to convene meetings in order to consider and potentially approve a restructuring plan. The company, which had been severely impacted by the coronavirus pandemic and was cashflow insolvent, had been threatened by winding-up petitions. The court held that the various requirements for the order to be made had been met, and an order would be made convening the proposed meetings. View
Re P G D Ltd (in liquidation) Manolete Partners plc v Hope and another (10 June 2022)
he Chancery Division allowed the appellant's appeal from a decision which had imposed a limitation on the amount of recoveries to pay off all liquidation debts, fees, remuneration and expenses. The appellant company had been assigned claims of a company that had gone into liquidation. The appellant brought claims against the respondents, former directors and shareholders of the company, for breach of duty and claims relating to unlawful dividends and undervalue transaction claims. The respondents were found to be jointly and severally liable for breach of duty and were ordered to pay. The judge, however ... View
he Chancery Division allowed the appellant's appeal from a decision which had imposed a limitation on the amount of recoveries to pay off all liquidation debts, fees, remuneration and expenses. The appellant company had been assigned claims of a company that had gone into liquidation. The appellant brought claims against the respondents, former directors and shareholders of the company, for breach of duty and claims relating to unlawful dividends and undervalue transaction claims. The respondents were found to be jointly and severally liable for breach of duty and were ordered to pay. The judge, however ... View
Official Receiver v Obaigbena (18 May 2022)
The Chancery Division dismissed the appeal of the appellant from a decision of the deputy insolvency and companies court which disqualified the appellant from being involved in the management of a limited company. The appellant argued that (i) the judge had applied the wrong legal test by failing to consider and decide whether the appellant had known or ought to had known that there was no reasonable prospect of creditors being paid or of the company avoiding insolvent liquidation; and (ii) that the judge erred in disqualifying the appellant for a period of 7 years. The court held, among other things ... View
The Chancery Division dismissed the appeal of the appellant from a decision of the deputy insolvency and companies court which disqualified the appellant from being involved in the management of a limited company. The appellant argued that (i) the judge had applied the wrong legal test by failing to consider and decide whether the appellant had known or ought to had known that there was no reasonable prospect of creditors being paid or of the company avoiding insolvent liquidation; and (ii) that the judge erred in disqualifying the appellant for a period of 7 years. The court held, among other things ... View
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