Re SHB Realisation Ltd (formerly BHS Ltd); Wright and another (as joint liquidators of SHB Realisations Ltd (formerly BHS Ltd)) v Prudential Assurance Companies Ltd [2018] EWHC 402 (Ch); [2018] All ER (D) 58 (Mar)

Synopsis

Daniel Gatty discusses the recent High Court ruling in Leon v Her Majesty’s Attorney General and others [2018] EWHC 3026 (Ch) and its impact on the grant of vesting orders following the disclaimer of a lease.

Readers of this column will be aware of the complications that can ensue when a lease is disclaimed by a tenant’s liquidator under section 178 of the Insolvency Act 1986 (IA 1986), by a tenant’s trustee in bankruptcy under section 315 of the IA 1986 or by the Crown under section 1013 of the Companies Act 2006 (CA 2006) following dissolution of a tenant company.

This is the third occasion on which I have posted on this blog on the issue of after the event insurance (ATE) policies and the impact which they have on applications for security for costs.

In the first post on 16 November 2017, I praised the judgment of Snowden J in Premier Motorauctions v Pricewaterhouse Coopers for appearing to bring clarity to an area which had for some time struggled with near irreconcilable decisions.

Can an adjudicator have jurisdiction over claims for sums owed to a referring party in liquidation? The TCC has decided in Lonsdale v Bresco that insolvency set-off precludes adjudication of such claims.

Background

Bresco had agreed to perform electrical installation works for Lonsdale in August 2014. Those works were not completed and both parties alleged wrongful termination. Bresco later became insolvent and entered into liquidation in March 2015.

The United States District Court for the District of Massachusetts recently dismissed a borrower’s complaint against a lender, finding that the lender did not wrongfully foreclose on the borrower or engage in predatory lending. SeeHealy v. U.S. Bank, N.A. for LSF9 Master Participation Tr., 2018 WL 3733934 (D. Mass. Aug. 3, 2018). In the case, the borrower executed a loan agreement secured by a mortgage on his house in 2004. In 2013, he defaulted on the loan, and the note and mortgage were assigned to the defendant lender thereafter.

The United States District Court for the Western District of New York recently reversed a Bankruptcy Court’s dismissal of an action and held that sales arising from tax foreclosures may be avoidable as fraudulent transfers. SeeHampton v. Ontario Cty., New York, 2018 WL 3454688 (W.D.N.Y. July 18, 2018). The case involves two adversary proceedings commenced by homeowners against the County of Ontario (the “County”). In each matter, the County foreclosed on plaintiffs’ homes after plaintiffs failed to pay property taxes.

The revised Practice Direction: Insolvency Proceedings

July 2018

The Wisconsin Supreme Court recently held that a mortgage servicer was not barred from bringing a second foreclosure action after the first action was dismissed with prejudice. SeeFederal Nat’l Mortg. Ass’n v. Thompson, 2018 WI 57 (Wis. 2018). In the case, a mortgage servicer brought a foreclosure action against the defendant borrower in November 2010, alleging that the borrower defaulted on his April 2009 loan payment. As part of the lawsuit, the servicer accelerated the debt.

The Supreme Court of New York, Suffolk County, recently granted a foreclosing plaintiff summary judgment and held that plaintiff did not need to send a 90-day notice pursuant to RPAPL 1304 because plaintiff was not a lender, assignee, or mortgage loan servicer. SeeNIC Holding Corp. v. Eisenegger, 59 Misc. 3d 1221(A) (N.Y. Sup. Ct. 2018). In the case, one of plaintiff’s employees was relocating and defendant wanted to purchase the employee’s home.

You have instructions to commence proceedings for damages for personal injury against a defendant company only to find that the company has entered in to a Company Voluntary Arrangement (“CVA”). What procedural issues arise and what steps should be taken?

What is a CVA?