Key Point

The mere fact that the law of the country in which an asset is situated does not recognise the trust concept does not necessarily invalidate the trust at least as far as English Courts are concerned.

The Facts

An action has successfully been brought by the administrators of Questway Limited, Oceancrown Limited and Loanwell Limited (all in administration) against Stonegale Limited and Norman Ralph Pelosi (the sole shareholder and director of Stonegale Limited) to reduce alienations of properties in Glasgow, under s.242(1) of the Insolvency Act 1986 (the “Insolvency Act”).

Of general interest is the appeal in the case of Horton v Henry, on which we reported in our January 2015 update. In Horton, the High Court declined to follow a previous ruling, and decided that a bankrupt could not be compelled to access his pension savings to pay off creditors.

The published judgment in Abbey Forwarding[1] will not make for comfortable reading for HMRC. Having instigated the winding up of a profitable business, which led to the dismissal of 23 employees, and accused  innocent directors of fraud, HMRC then withdrew all assessments made against the company and attempted to avoid undertakings it had given to the court when seeking the original winding up order.

The High Court has held that a bankrupt’s unexercised rights to draw his pension did not represent income to which the bankrupt was entitled and so refused to make an income payments order, contradicting the controversial decision in Raithatha v Williamson which held that a bankrupt’s right to draw income from a personal pension may be subject to an income payments order even if the individual has yet to draw his pension.

Horton v Henry [2014] EWHC 4209 (Ch)

In the recent decision of Horton v Henry [2014] EWHC 4209 (Ch) the High Court held that a Bankrupt’s unexercised rights to draw his pension did not represent income to which the Bankrupt was entitled within the meaning of section 310(7) of the Insolvency Act 1986 and so refused to make an Income Payments Order. This contradicted the controversial decision in Raithatha v Williamson [2012] EWHC 909 (Ch) and has created uncertainty as to which is the correct position. The Horton case is being appealed.

We welcome the Government’s announcement today that the insolvency exemption to the Jackson reforms will remain in place for the foreseeable future, although it will be reviewed later in the year.

Following the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012, success fees under “No Win, No Fee” conditional fee agreements are generally no longer recoverable from opponents and neither are premiums under after the event (ATE) legal expenses insurance policies.

The Government has, today, announced that the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012 reforms for insolvency proceedings are being delayed for the time being, and will therefore not come into force on 1 April 2015.

Mr and Mrs D (the “Second and Third Defendants”) owned and controlled Stoke Place Hotel Ltd (the First Defendant) and were also major shareholders of DHL (a hotel company) which went into administration in September 2012 (the “Administration”).

Valuation Valuation issues tend to be at the heart of any intercreditor dispute in a restructuring. And the art of valuation becomes absolutely critical in the context of a scheme, because creditors with no economic interest need not be invited to vote on a scheme which seeks to compromise creditor claims1 .