In a second application heard on the same day, Hildyard J considered an application by the administrators of Lehman Brothers Europe Limited (LBEL) for directions that would enable a surplus to be distributed to the sole member of LBEL while LBEL remained in administration. The proposed scheme had material benefits for both shareholders and creditors. The administrators acknowledged that the orders sought were an indirect means of circumventing the Insolvency Act 1986 (UK), which does not expressly provide for directors to make distributions during an administration.
BACKGROUND
The Court of Appeal has recently dismissed an appeal from the High Court's judgment (discussed in our September 2016 update) setting aside a compromise under Part 14 of the Companies Act 1993 after finding that the challenging creditors, who had voted against the compromise, had been unfairly prejudiced by the decision to call only one meeting of creditors.
In McIntosh v Fisk [2017] NZSC 78, the New Zealand Supreme Court had to consider whether the liquidators of a Ponzi scheme were entitled to recover from an investor a payment that the investor had received shortly before the appointment of the liquidators.
In Royal Bank of Canada v. Casselman, three motions were brought before the Court. First, a continuation of a motion for approval and directions brought by the receiver. Second, a motion to allow counsel for the debtor to withdraw as lawyer of record. Third, a motion by the Sexton Group Ltd.
The Ontario Court of Appeal released its much anticipated decision on the appeals taken from the trial decision of Justice McEwen in Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP et al.
The case of Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd [2017] EWHC 257 (Ch) concerned the liability of a stockbroking company for failing to investigate fraudulent transactions.
In Akers & Ors v Samba Financial Group (Rev 1) [2017] UKSC 6, the UK Supreme Court confirmed that British insolvency officers can only void dispositions of a company's assets held on trust in certain circumstances.
In the recent unreported decision, Bank of Nova Scotia et al v. Virginia Hills Oil Corp. et al, File No. 1701-02184, the Alberta Court of Queen’s Bench held that not all municipal property tax claims are priority secured claims in an insolvency.
The Supreme Court in McIntosh v Fisk upheld the Court of Appeal decision permitting the liquidators of Ross Asset Management Ltd (RAM) to claw back the fictitious profits paid out to Mr McIntosh. However the claw back did not apply to the original investment of $500,000.
The majority found that McIntosh had a defence for the $500,000 as he had provided "real and substantial valuable consideration". Once RAM misappropriated the $500,000 it became indebted to McIntosh for that amount, this equated to the provision of valuable consideration.