Looking back at 2023, one of the more memorable judicial decisions emanating from Jersey was the decision of the Court of Appeal in HWA 555 Owners, LLC v Redox PLC S.A. and Thieltgen [2023] JCA 085. In this update we explore how this decision might impact upon the creditors’ winding-up regime provided for in the Companies (Jersey) Law 1991.
HWA 555 Owners, LLC v Redox PLC S.A. and Thieltgen
Introduction
In the recent judgement of In the matter of SPARC Group Limited (en désastre) [2022] JRC 194 (SPARC Group), the Royal Court of Jersey considered the appropriate test for the making of a disqualification order against a director, with the stark nature of the facts justifying a lengthy term of disqualification.
Background
The application for a disqualification order was made by the Viscount, in respect of Andrew Jeremy Mills (Mr Mills), who was the sole director of SPARC Group Limited (the Company), a property development business.
What is the so-called "creditor duty"?
This is the duty, introduced into English common law by the leading case of West Mercia Safetywear v Dodd1 in 1988, of company directors to consider, or act in accordance with, the interests of the company's creditors when the company becomes insolvent, or when it approaches, or is at real risk of insolvency.
Background
On 22 July 2022, the English High Court sanctioned Houst Limited’s (“Houst” or the “Company”) restructuring plan (the “Restructuring Plan”), which significantly, is the first time a Restructuring Plan has been used to cram down HM Revenue & Customs (“HMRC”) as preferential creditor.1
Background
On 12 January 2022, the English High Court granted Smile Telecoms Holdings Limited’s (“Smile” or the “Company”) application to convene a single meeting of plan creditors (the super senior creditors) to vote on the Company’s proposed restructuring plan (the “Restructuring Plan”). It is the first plan to use section 901C(4) of the Companies Act 2006 (“CA 2006”) to exclude other classes of creditors and shareholders from voting on the Restructuring Plan on the basis that they have no genuine economic interest in the Company.
Background
On the 19th of August 2021, the English High Court sanctioned a Part 26A restructuring plan proposed by the administrators of Amicus Finance plc (in administration) (“Amicus”) for the company’s solvent exit from administration, enabling the company to be rescued as a going concern (the “Restructuring Plan”).
On 29 September 2021, the English High Court rejected a challenge in respect of Caff Nero's company voluntary arrangement ("CVA"), brought by a landlord on the grounds of material irregularity and unfair prejudice. The single disgruntled landlord, with the backing of the EG Group ("EG") (who were interested in acquiring Caff Nero), argued that the directors of the company and the CVA nominees breached their respective duties in refusing to adjourn or postpone the electronic voting process to vote on the CVA, after EG had submitted an eleventh-hour offer for Caff Nero.
Key Takeaways
Key Takeaways
On 2 June 2020, Mr Justice Morgan handed down his judgment in the case of Re: A Company [2020] EWHC 1406 (Ch) in which a High Street retailer (whose identity is not disclosed) applied to restrain the presentation of a winding-up petition based on the provisions of the yet-to-be-enacted Corporate Insolvency and Governance Bill 2020 (the “Bill”).