A recent judgment has clarified the duty of receivers when selling secured property to a company connected to a creditor.
Background
The claimant alleged that the receivers, appointed on behalf of, and selling to a party connected to the creditor, had acted in bad faith. They had placed themselves in a position of conflict and had engaged in self-dealing. As well as dealing with this issue, the court also assessed where the burden of proof lies when allegations of failing to act in good faith are raised.
Held
Pantiles Investments Limited & Anor v Winckler [2019] EWHC 1298 (Ch)
Background
The Liquidator of the Pantiles Investments Limited (Company) brought a claim (among others) for fraudulent trading against its former director, Ms Winckler. The claim related to a property transaction involving Ms Winkler, an associate (Mr Goldbart) and the Company. In summary, the transaction was as follows:
Failures rates in franchising are typically much lower than non-franchised start-ups. However, the latest British Franchise Association/NatWest survey of the UK franchising sector cites franchisee underperformance as one of the three key concerns of franchisors, and franchise businesses are of course not immune from the economic headwinds and technological changes which are affecting various sectors.
A creditor who has a monetary judgment against a debtor (“the judgment debtor”) can obtain an order from the Court directing that an identified third-party (“the garnishee”) who owes money to the judgment debtor instead pay the money it owes to the judgment creditor, in full/ partial discharge of the judgment debt.
Insolvency may seem an unlikely scenario for your pension plan's employer today and for the foreseeable future but the Pension Protection Fund (PPF) has recently published guidance recommending that defined benefit pension plan trustees should make contingency plans for employer insolvency "as with any sensible business continuity or disaster recovery planning".
As the insolvency profession in Scotland continues to get to grips with the new corporate insolvency rules, Re Sprout Land Holdings Ltd (in Administration) serves as a timely reminder not to forget the basics when dealing with the appointment of administrators by the directors of a company.
Can a Creditors Voluntary Arrangement (CVA) lead to a stay in the enforcement of an adjudicator’s decision?
In January of this year the Court of Appeal refused to stay enforcement of an adjudication award due to a CVA ((1838) Cannon Corporate Limited v Primus Build Limited [2019] EWCA Civ 27). Four months later another enforcement decision against a company subject to a CVA came before the Technology and Construction Court (TCC). This time a stay was granted – so what was the difference?
This is often a question for faced by office-holders of insolvent companies when investigating a company’s affairs, and more of a concern for former directors and shareholders when potentially facing a claim for the return of unlawful dividends or misfeasance.
The Directors of a Company that cannot pay its debts can choose to put the Company into voluntary liquidation. Indeed Directors have statutory responsibilities not to permit a Company to trade insolvently. If they allow the Company to trade insolvently they can become personally liable for the debts.
A creditor can also put a company debtor into compulsory liquidation. The amount owed must be not less than £750 and the creditor must either have an admission that the debt is owed, or a Court judgment.