Legislation
Case Law

 

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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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Re Ipagoo LLP (in administration) (30 July 2021)
The administrators of a company in administration sought the answers to two questions. The Chancery Division held that, first, Regs 20-22 and 24 of the Electronic Money Regulations 2011, SI 2011/99 (the EMR) did not create a statutory trust in favour of electronic money holders, but gave a statutory right for them to be paid out of relevant funds in priority to all other creditors on the terms set out in Reg 24 (of the EMR). Second, the definition of 'asset pool' in Reg 24 included a sum equal to any relevant funds which ought to have been, but had not been, safeguarded under Regs 20-22 by means of two safeguarding options.
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Re Peter Herbert Fowlds (a bankrupt) (30 July 2021)
The appellant trustees in bankruptcy appealed a decision refusing to grant relief requiring the respondent to repay a preferential payment under s 340 of the Insolvency Act 1986 on the basis that the respondent had established a change of position so as to refuse relief. The Chancery Division, dismissing the appeal, held that the judge had erred in finding that a change of position of the transferee amounted to a defence under s 340, but that the judge had been correct to find that there were factors that had justified refusing the trustee's claim in the instant case.
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Re a company (1 July 2021)
Company – Compulsory winding up. The applicant company's application for an order restraining the respondent company from presenting a winding-up petition against it succeeded. The respondent sought the recovery of sums allegedly due for consultancy services. The Chancery Division held that the matter was plainly unsuitable for disposal by way of winding-up proceedings.
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Quick Draw LP v Global Live Events LLP (in liquidation) and others (29 June 2021)
Practice – Pre-trial and post judgment relief. Following a decision in which adverse findings had been made against him, the second defendant applied to set aside a final order on the basis that there had been a breach of the rules of natural justice in the proceedings. The Chancery Division, dismissing the application, held that there had been no breach of natural justice by allowing the claimant's closing submissions to follow those of the defendants in the action.
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Re Hurricane Energy plc (28 June 2021)
Company – Arrangement. The applicant company unsuccessfully applied for an order sanctioning a restructuring plan. In dismissing the application, the Chancery Division held that despite the court having jurisdiction to sanction the restructuring plan under Pt 26A of the Companies Act 2006, as decided in [2021] All ER (D) 83 (May), the discretion provided in s 901G of the Act to sanction a plan under condition A was not satisfied. That was because, among other things, the relevant alternative involved on each side's case allowed for the company's continued profitable trading for at least a further year and there was a realistic prospect that the company would be able to discharge its obligations to the bondholders, leaving assets with at least potential for exploitation, which was enough to refute the contention that the shareholder members, as the dissenting class, would be no better off under the relevant alternative than under the plan, as required by s 901F of the Act. Accordingly, the discretion as to whether to sanction the plan did not fall to be exercised.
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