Marex Financial Limited v. Carlos Sevilleja Garcia [2017] EWHC 918 (Comm)
This recent decision on a jurisdictional challenge has provided greater clarity and potentially created a tortious cause of action where a debtor dissipates assets prior to judgment and subsequent freezing order.
Background
On 2 March Cambridgeshire-based merchant WellGrain went into administration, reportedly owing at least £15m to almost 300 creditors, many of those being farmers.
The administrators' report has now been published and indicates that the unsecured creditors - including some 155 farmers - will expect to receive between 1.4 - 6.7 pence for every pound they are owed.
It is an announcement which will no doubt be met with dismay by those creditors. However, it is not unusual that unsecured creditors of an insolvent company will receive little or no payment.
This recent decision on a jurisdictional challenge has provided greater clarity and potentially created a tortious cause of action where a debtor dissipates assets prior to judgment and subsequent freezing order.
Background
Karhoo, a US incorporated company able to benefit from the Chapter 15 US bankruptcy code provision for foreign insolvency proceedings following UK Administration.
Today, thanks to the high-cost of current court fees, small to medium-sized enterprises (SMEs) face the problem of not getting paid by a customer and then, subsequently, not being able to go to court to get paid.
On 6 April 2017, the Insolvency Rules 2016 came into force. The new rules aim to modernise the insolvency process; and make it more efficient. Physical meetings, as the default decision making process, have been abolished. Where the debtor ‘customarily’ communicated with a creditor by way of email notices can be served by email under deemed consent, rather than through the post. The rules also introduce the use of websites to publish notices, without the need to inform creditors of any postings.
In the matter of the désastres of Gail Alison Cochrane and Orb a.r.l.
1. Harbour Fund II LP v. (1) Orb a.r.l. (2) Litigation Capital Funding [2017]JRC171 ("the September judgment")
2. Harbour Fund II LP v. (1) Orb a.r.l. (2) Dr Gail Cochrane [2017]JRC007 ("the January judgment")
3. Representation of the Viscount re Cochrane and Orb a.r.l. [2017]JRC025 ("the February judgment")
The procedure for an application to Court for the appointment of an Administrator pursuant to paragraph 12 of Schedule B1 IA 86 is covered by r3.3-3.15 of the 2016 rules.
Key points to note:
The procedure for Debt Relief Orders ("DRO") is unchanged, possibly because it is a comparatively new process having only come into force in 2009. However there has been some shuffling of rules numbers, in an effort to regularise and make the structure more logical.
Eligibility
To be granted a DRO, the debtor:
English Liquidators of a fraudulent investment company were able to navigate a complex web of defunct companies and trusts to realise assets in a Jersey company.
The partners of Arck LLP (in Liquidation), registered in England ("Arck"), an investment firm, were convicted of fraud and forgery. Richard Clay, thought to be the driving force of the scandal, is now serving a 10 years 10 months prison sentence and his deputy Kathryn Clark received a two year suspended sentence.