The High Court has granted three insolvent Cayman companies (each in liquidation) a worldwide freezing order in support of proceedings against Mr Terrill, an individual who operated behind the companies' respective corporate directors as their sole director and shareholder.  The court exercised its discretion to grant the injunction despite there being a delay of more than a year between the discovery of suspicious transactions linked to Mr Terrill and a Letter of Request applying for a freezing order being sent by the Cayman court together with the companies' liquidators to the Englis

The High Court has considered whether the title to a freehold property could be re-vested in a company restored to the register of companies where the Crown had disclaimed its interest whilst the company was dissolved.

Background

This decision of the Chancery Division is a useful reminder to lenders of the Court’s power to set aside a transaction intended to defraud a creditor under s.423 of the Insolvency Act 1986.

The Facts

The Defendant, Mr Ahmed, was registered as the proprietor of two properties known as High Elm and Hilltop (the “Properties”). The Claimant advanced monies to be secured over the Properties by second legal charge. The Defendant fell into arrears and the Claimant commenced possession proceedings.

Introduction

The High Court has recently considered whether directors were in breach of their duties after a company entered insolvency. Specifically, the Court considered whether it could exercise its discretion in accordance with section 212 of the Insolvency Act 1986, whereby the Court can order summary judgment against an officer of the company who has misapplied, retained or become accountable for money or property of the company, or been guilty of any misfeasance or breach of fiduciary or other duty in relation to the company.

The Claim

As of 1 October 2015, a number of changes have been introduced to insolvency law in the UK with more to follow on 10 October 2015 and then in April 2016.  The key developments implemented in October 2015 will affect both companies and individuals.

From 1 October 2015

Personal Insolvency

The European Commission has published the VAT gap report for 2013 for 26 member states (Cyprus and Croatia are not included). The VAT gap is an estimate of VAT lost due to fraud and evasion, avoidance, bankruptcies/insolvencies and miscalculations. According to the report, VAT revenue collection in 2013 failed to show significant improvement across member states compared with 2012.

In September 2013 we reported on the Enterprise and Regulatory Reform Act 2013 which provided the Government with the power to extend the law regarding the supply of essential services to insolvent customers. These reforms were anticipated to come into force in April 2014. It has now been announced that the changes will come into force on 1 October 2015.

Extension of essential supplies

In Winnington Networks Communications Ltd v HMRC^[1], the Chancery Division Companies Court (Nicholas Le Poidevin QC) refused the taxpayer company's application to have HMRC's winding-up petitions dismissed, as it had failed to provide evidence that it had a real prospect of successfully disputing the debt claimed by HMRC.

Background

As well as serving as a useful reminder of the law surrounding wrongful trading and the operation of section 214 Insolvency Act 1986, this recent High Court decision clarified where the burden of proof lies in defending a wrongful trading case.

Background