The High Court has considered whether trustees in bankruptcy are in breach of sanctions by allowing sanctioned Russian creditors to participate in UK insolvency proceedings.

Background

A Russian national, resident in London is subject to bankruptcy proceedings both in Russia and the UK. The bankrupt's creditors include four Russian banks in liquidation in Russia. The UK trustees in bankruptcy applied to the court for directions concerning three main questions:

The liquidator of UKCloud Ltd (the Company) applied to the court for directions as to whether a debenture granted by the Company created a fixed or floating charge over certain internet protocol (IP) addresses. The lender argued that it had a fixed charge.

Fixed or floating?

The High Court considered whether a limitation period could prevent the presentation of a winding up petition based on a Lebanese judgment debt which was not registered as an English judgment.

Background

The creditor presented a winding up petition based on a judgment debt of $776,907.51 obtained in a Lebanese court in 2010. The debtor applied to restrain presentation of the petition on grounds that the judgment had not been registered nor recognised by the English Courts and the claim was time-barred.

Recognition

The English High Court has considered, on appeal, whether a foreign judgment constitutes a "debt" for the purposes of a bankruptcy petition.

Background

A bankruptcy petition served by Servis-Terminal LLC (ST) was based on a Russian court judgment obtained against Drelle, a former director of ST. The judgment had been upheld following appeals to superior courts in Russia.

There was no evidence that Drelle would be able to pay the judgment debt which was considerably more than the bankruptcy threshold.

Appeal

The High court has recently considered whether permission should be given retrospectively to lift an administration moratorium to allow a counterclaim to proceed.

Background

The counterclaim had been brought by WWTAI against CargoLogicAir Ltd (in administration) (CLA) without the consent of the administrators or the Court. CLA contended that the counterclaim was issued in breach of the statutory administration moratorium and should be struck out.

Solely to set off

On 4 March 2024, the High Court approved the amended restructuring plan (the Plan) of Project Lietzenburger Straße Holdco S.à.r.L (the Company) a Luxembourg incorporated company part of the German Aggregate Holdings Group, despite refusing to sanction its original plan.

One difficulty encountered by creditors and trustees in bankruptcy is the use of one or more aliases by a bankrupt. Whether it is an innocent use of a nickname or an attempt to conceal one's identity, the use of an alias can often create problems for creditors seeking to pursue debts and for trustees seeking to recover assets held by a bankrupt.

How does it happen?

As concerns about illegal phoenix activity continue to mount, it is worth remembering that the Corporations Act gives liquidators and provisional liquidators a powerful remedy to search and seize property or books of the company if it appears to the Court that the conduct of the liquidation is being prevented or delayed.

When a person is declared a bankrupt, certain liberties are taken away from that person. One restriction includes a prohibition against travelling overseas unless the approval has been given by the bankrupt's trustee in bankruptcy. This issue was recently considered by the Federal Court in Moltoni v Macks as Trustee of the Bankrupt Estate of Moltoni (No 2) [2020] FCA 792, which involved the Federal Court's review of the trustee's initial refusal of an application by a bankrupt, Mr Moltoni, to travel to and reside in the United Kingdom.

What makes a contract an unprofitable contract which can be disclaimed by a trustee in bankruptcy without the leave of the Court under section 133(5A) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act)? Can a litigation funding agreement be considered an unprofitable contract when the agreement provides for a significant funder's premium or charge of 80% (85% in the case of an appeal)?