A prominent High Court case involving TV presenter Trinny Woodall and her late ex-husband’s creditors has provided a useful insight into the handling of debts following a divorce.

Ms Woodall married Johnny Elichaoff in 1999 and after a ten year marriage, the couple divorced in 2009.

During the divorce settlement it was agreed that Mr Elichaoff would pay Ms Woodall and their daughter £24,000 a year and repay a sum of £1.4 million to her.

However, just nine days before the divorce was finalised Mr Elichaoff was made bankrupt and the repayment was later declared void.

Transactions Defrauding Creditors

In JSC BTA Bank v Ablyazov and another the Court considered the transfer of £1.1million from Mukhtar Ablyazov to his son in 2009 at a time when his son was 17. The money was used by the son for investments in support of his Tier 1 investor visa. The investments matured in March 2014 and were held in the son’s account.

Key Points

• Provisions of the Civil Procedure Rules apply to applications for an extension of time to apply for rescission of winding up order

• Any such extensions of time should be exceptional and for a very short period

The Facts

Background

It is a criminal offence to continue trading using the name of a company which has gone into insolvent liquidation (a prohibited name).

Judgment

The Court of Appeal has just ruled on a case relating to confiscation orders made against individuals who illegally trade under a prohibited name. In this case, the defendant was given community service, and ordered to pay a confiscation order of £100,000, plus costs. The individual appealed the confiscation order on various grounds.

The court concluded that:

The recent successful appeal in Brooks and another (Joint Liquidators of Robin Hood Centre plc in liquidation) v Armstrong and another [2016] EWHC 2893 (Ch), [2016] All ER (D) 117 (Nov) has clarified and highlighted the complexities of bringing a wrongful trading claim and the importance of correctly quantifying losses for which directors can be made personally liable under section 214 and/or 246Z of the Insolvency Act 1986 (“the Act”).

Fomento De Construcciones Y Contratas SA v Black Diamond Offshore Ltd (Court of Appeal hearing)

The Court of Appeal has rejected an appeal brought by a leading Spanish company ("FCC") against a first instance decision that an event of default had occurred in respect of a debt instrument.

Background

For officeholders seeking to recover sums pursuant to s.127 Insolvency Act 1986, the recent Court of Appeal judgment in Express Electrical Distributors Ltd v Beavis and Others[2016] EWCA Civ 765 provides an interesting development (equally in relation to retrospective validation applications).

The recent case of Re Newtons Coaches Limited [2016] EWHC 3068considered whether a partnership falls within the remit of s.216 Insolvency Act 1986 (“IA 86”).

Deep Purple was, and still is, a rock music band. Its members included Mr Gillan, Mr Glover and Mr Paice. In 2005, band members entered into an agreement with HEC Enterprises Limited (HEC) and Deep Purple (Overseas) Limited (DPO). Under that agreement, the parties agreed to form a new company named Purpletuity, to which various copyrights and other assets were to be transferred. In 2015, Mr Gillan, Mr Glover and Mr Paice commenced proceedings against HEC and DPO to enforce that agreement.

In Mclean v Trustees of the Bankruptcy Estate of Dent [2016] EWHC 2650, the High Court considered the application of the equitable doctrines of marshalling and subrogation in relation to a fixed charge over (among other things) a dog.

A company and partnership borrowed funds from two sources – Barclays Bank and Lady Morrison. Barclays held, among other things, charges over farms owned by individual partners and an agricultural charge under the Agricultural Credits Act 1928 (UK), including a charge over a dog. Lady Morrison only held charges over the farms.