Tommy Robinson, founder of the English Defence League was in court last week being pursued by the many people he owes money to. This has increased scrutiny on whether he genuinely disposed of assets in his timely divorce from Jenna Lennon.

In Re AFM (1932) Ltd (in liquidation) [2021] EWHC 3460 (Ch) the court confirmed that where an applicant is already contractually entitled – as against another party - to be reimbursed, together with interest, by that other party in an amount equivalent to the value transferred by that applicant under a related transaction, there cannot be a transaction at an undervalue pursuant to section 238 of the Insolvency Act 1986.

Facts

Creditors of English Defence League founder Tommy Robinson (real name Stephen Yaxley-Lennon) have appointed a licensed insolvency practitioner to act as his Trustee in Bankruptcy to investigate any claims against him and seek to recover any hidden assets.

Robinson applied for bankruptcy shortly after his divorce in February 2021, and while libel proceedings were ongoing against him. A bankruptcy order was made on 3 March 2021. In July 2021, Robinson was ordered to pay £100,000 in damages, together with legal costs, on top of his bankruptcy debts, which are estimated at £2m.

In what is believed to be the first reported decision on this issue, the High Court has allowed an appeal under section 205(4) of the Insolvency Act 1986 (IA 1986) against a decision of the Secretary of State to defer the dissolution of a company in liquidation.

A link to the judgement can be found here.

The facts

On May 7, 2021, we issued a legal alert regarding third-party releases as part of the plan of reorganization in the Perdue Pharma case. [Purdue Pharma: Is Protection of Third Parties by the Automatic Stay an Oxymoron?] The order confirming that plan was appealed and our subsequent legal alert dated December 21, 2021 discussed the decision by Judge Colleen McMahon of the U.S.

Administrators of Arena Television are reportedly investigating an alleged fraud involving millions of pandemic loans, where government-backed loans were offered to businesses to help them deal with the pandemic, and are suing two of the directors for breach of fiduciary duty. More companies may be in a similar position as, according to the National Audit Office, it is likely that the level of fraud in the bounce back loan scheme ranges from £3.5bn to £4.9bn. Who can claim these ill-gotten gains?

Directors’ duties

On May 7, 2021, we issued a client alert regarding the Perdue Pharma case and the possibility that the bankruptcy case could include a release of individual non-debtor members of the Sackler family. At that time, a plan which contained terms that would effectively extend the automatic stay protections was confirmed by Judge Robert D. Drain, who presided over the bankruptcy case in the Southern District of New York.

Since the beginning of the COVID-19 pandemic and in 2020 alone, approximately 7,300 companies filed for Chapter 11 bankruptcy.[1] Of those, forty-two awarded pre-bankruptcy retention bonuses to 223 executives, totaling approximately $165 million.[2] These p

The Commercial Rent (Coronavirus) Bill 2021 (the Bill) is expected to come into force from 25 March 2022 – it is intended to introduce an arbitration procedure for commercial rent arrears accrued by businesses during the “protected period” and also to extend the restrictions on the use of winding up proceedings and now to include personal bankruptcy.

The “protected period” relates to business tenancies adversely affected by the pandemic either by enforced closure or restrictions placed on trade. This period – as set out in section 5 of the Bill – runs from:

In the first three months of 2021, almost 40,000 companies were struck off the Companies House register – an increase of 743% on the same period in 2020. Speculation that these figures related to avoidance of coronavirus-related loan repayments led the Department for Business, Energy and Industrial Strategy to take the highly unusual step, in March 2021, of making a blanket objection to any application for dissolution by a company with an unpaid bounce-back loan.