In an article that first appeared on LexisNexis on 26 February 2018, Jon Chesman examines a High Court decision which found the applicant liquidator of a company had made out her case that a transfer of stock from the company to the first respondent, a former director of the company, amounted to a preference and a transaction at an undervalue, so relief ought to be granted under the Insolvency Act 1986 (IA 1986).
Breese (liquidator of Flexi Containers Ltd) v Hiley and others [2018] EWHC 12 (Ch), [2018] All ER (D) 77 (Jan)
Collapsed retailer British Home Stores cannot challenge its own company voluntary arrangement as an unenforceable contractual penalty and must repay rental discounts to its landlords, the High Court in England and Wales decided yesterday.
The case, in which Hogan Lovells represented the successful landlord, provides important guidance on the operation of company voluntary arrangements (CVAs), particularly after termination, and the payment of rent as an expense of a company’s administration in priority to other debts.
CVAs
Brent crude’s 18-month slide from above $110bbl to a January 2016 low of under $30bbl led to a number of high-profile North Sea upstream restructurings. This article considers what we can learn from recent cases and how they can inform the approach of companies, lenders, bondholders and restructuring professionals in future cases in the sector.
JWS has achieved a significant win on behalf of Linc’s liquidators, PPB Advisory, in their proceedings against the Queensland State Government in relation to Linc’s environmental liabilities. The Queensland Court of Appeal has unanimously overturned the Supreme Court judgment of Jackson J, which was the subject of an appeal hearing in September 2017 at which Bret Walker SC appeared for the liquidators.
Directors against whom claims for a misfeasance have been intimated often turn to limitation and set off in defence of a request for the repayment or restoration of the relevant sums or property.
Misfeasance and limitation
Tiuta International Ltd (In Liquidation) v De Villiers Surveyors Ltd [2017] UKSC 77
Overview
The Court of Appeal has released an important decision for landlords and tenants concerning applications for consent to assign a lease, overturning the High Court's earlier decision in No.1 West India Quay (Residential) Ltd v East Tower Apartments Ltd.
The Court of Appeal decided that one bad reason for a landlord refusing its consent will not render the entire decision to withhold consent unreasonable, so long as there are other reasons for the refusal which are good and free-standing.
Key points
The High Court struck out a claim by a liquidator who had already brought a claim arising from the same facts against the same defendants.
The court relied on the fact that the economic benefit of pursuing the claim would accrue only to the liquidator.
The Facts