The facts of this case were somewhat unusual although it serves as a reminder of the principles involved in the trading of a business by a trustee in bankruptcy.
Background
JMW Solicitors have recently obtained an Order made pursuant to Section 234 of the Insolvency Act 1986 (the “Act”), which includes a term that allows the office-holder to recover possession of a residential property, without the need for separate possession proceedings being issued pursuant to Part 55 of the Civil Procedure Rules (“CPR”), which sets out the usual Court procedure for obtaining an order for possession of land.
The background facts to this case are relatively straightforward: a group of companies consisting of the parent (‘AIL’) and three subsidiaries (‘the Subsidiaries’) operated in the energy sector.
A lender (‘Junior Creditor’) advanced approximately £39M to AIL, secured by qualifying floating charges (‘QFC’) over AIL and the Subsidiaries. A second lender (‘Senior Creditor’) subsequently lent £5M to AIL secured by a QFC over AIL but not the Subsidiaries.
Twelve creditors (representing about 16% of company debt, and represented by a firm of licensed insolvency practitioners) have failed in an attempt to compel administrators to move to creditors’ voluntary liquidation, alternatively an order for compulsory liquidation. The Creditors also sought the revocation of a proposal ‘purported to have been deemed approved’.
The Company was involved in construction work, falling victim to the Covid-19 pandemic in that it was forced to cease trading following the announcement of lockdown on 23 March 2020.
The Key Issues and Background
The Court of Appeal was asked to consider two key points (together with matters, including relating to the granting of summary judgment) regarding the procedural aspects of applications in insolvency proceedings. The relevant proceedings were issued by the trustees in bankruptcy of Nicola Ide (the “Trustees”).
First, could the County Court transfer part of insolvency proceedings to the High Court?
The Key Issues and Background
The Court of Appeal was asked to consider two key points (together with matters, including relating to the granting of summary judgment) regarding the procedural aspects of applications in insolvency proceedings. The relevant proceedings were issued by the trustees in bankruptcy of Nicola Ide (the “Trustees”).
First, could the County Court transfer part of insolvency proceedings to the High Court?
Cory Bebb looks at a recent unsuccessful attempt by Administrators to block an £18.6M misfeasance claim by contributories.
“All cats are animals, but all animals are not cats” - former administrators’ attempt to stop £18.6M misfeasance claim based upon their CVA release clause, fails in a provisional ruling: Re Rhino Enterprise Properties Limited [2020] EWHC 2370 (Ch)
The case of Re Lehman Brothers Europe Ltd (In Administration)[2020] EWHC 1369 (Ch) in May 2020 highlighted the importance of ensuring that creditors or the creditors committee approve the discharge of Administrators’ liability pursuant to paragraph 98 of Schedule B1 to the Insolvency Act 1986.