These case summaries first appeared in LexisNexis’ Insolvency Case Alerter. They represent some of the more interesting insolvency decisions to have been published recently.
This summary covers:
Introduction
Introduction
The recent decision of Andrew Burrows QC, sitting as a Judge of the High Court, in Palliser Limited v Fate Limited (In Liquidation) [2019] EWHC 43 (QB), is a useful reminder of the difficulties that can arise where one party (here a tenant) relies on another (its landlord) to take out insurance.
The Facts
In 2010, a fire started at the ground floor restaurant owned and operated by a company called Fate Limited (“Fate”). It was not in dispute that the fire was caused by Fate’s negligence.
This case arose from the ongoing administration of Lehman Brothers International (Europe) (‘LBIE’). The appeal considered the proper ranking of certain subordinated debt in the insolvency ‘waterfall’, among other matters.
Held
The first issue concerned the construction of debt instruments subordinated to amounts ‘payable in the insolvency’. It was held that such amounts included statutory interest and non-provable debts, and accordingly those liabilities must be met before any balance could be used to pay off the subordinated loans.