The facts
Through corporate acquisitions and asset transfers, BAT Industries plc (“BAT”) (a Claimant in the proceedings) became liable to contribute to the clean-up of the sediment of the Lower Fox River in Wisconsin, U.S.A. Arjo Wiggins Appleton Limited (“AWA”), a wholly owned subsidiary of Sequana SA (“Sequana”) (a Defendant in proceedings), became liable to indemnify BAT for part of any monies paid out. Provision was duly made in AWA’s accounts to reflect a best estimate of the value of such liability.
Key Points
The Facts
The applicants were judgment creditors of a Robert Williams (Robert). They obtained a charging order against Roberts’s beneficial interest in 75% of the shares in a company in administration and eventually became full legal owners of those shares.
Introduction
In BTI 2014 LLC v Sequana SA [2016] EWHC 1686 the High Court was recently asked to consider whether:
- payment of dividends contravened Part 23 of the Companies Act 2006;
- the decision to pay the dividends was a breach by the directors of their fiduciary duties towards the company; and
- the dividends were transactions defrauding creditors under Section 423 of the Insolvency Act 1986.
The Claim
Arjo Wiggins Appleton Limited (“AWA Limited”) was a wholly owned subsidiary of Sequana SA (the “Defendant”). BAT Industries Plc (“BAT Plc”), through a series of corporate acquisitions, became liable to pay for part of an environmental clean-up operation in the USA. AWA Limited was also liable to indemnify BAT Plc for part of that liability.
In December 2008, AWA Limited’s directors signed a solvency statement confirming that, in the opinion of the directors;
The aim of a payment action is to recover monies due. Obtaining a positive judgment from the court is just the first step in that process. The party with the benefit of the judgment still needs to enforce the order if payment is not made. This guide describes what enforcement means in practice and the approach to enforcement in Scotland.
Getting started
To enforce a court decree in Scotland, creditors need to do the following:
A company in liquidation appealed against a decision that its claim against the directors, for breach of fiduciary or statutory duty in relation to distribution in specie of the claimant company’s shareholding in another company, was time-barred.
The recent case of James William Stares v Elgin Legal Ltd [2016] EWHC 2523 (Ch) is notable as it considers whether a former administrator can apply for an administration order and, if such an order can have retrospective effect.
In the case of Re BW Estates Ltd the High Court considered the validity of a directors’ out of court appointment in circumstances where there was technically an inquorate directors’ board meeting.
A winding up order can be used by creditors to enforce payment of a debt by a delinquent company. Often as an act of last resort, creditors petition the court to have the business liquidated, usually after several failed attempts to recover their money.
The expense of going through the courts to obtain an order of this type indicates their determination, and this is a method often used by large secured creditors such as HMRC and the banks.