The High Court considers questions relating to the location of three companies' COMIs and an alleged "improper motive" regarding the appointment of administrators

The English High Court were persuaded to lift the automatic stay imposed under the Cross-Border Insolvency Regulations (SI 2006/1030) in relation to Korean proceedings, to allow English litigation proceedings to be continued by an unsecured creditor.

The Court interpreted the terms of a Termination Agreement and found that the Applicant, Europa, was entitled to €1.3 million from the Defendant, AII, in relation to funds invested on Europa's behalf, which had been paid out and held by AII. As a matter of construction, it could not have been intended that AII should be left with sums owing to an investor following a Termination Agreement.

In a recent landmark cross border decision the Düsseldorf Higher Regional Court clarified that general managers cannot rely on their Directors and Officers Liability Insurance cover (D&O) in the event of a claim for repayment under Germany's "wrongful trading" legislation. 

Providing cover for the directors and officers of a company or the company itself, D&O insurance provides reimbursement in the event the insured suffers loss as a result of legal action brought for alleged wrongful acts of the directors and officers.  

The Facts

Mr Brown was declared bankrupt on 12 May 2016, following possession proceedings and costs order against him which had not been paid. Mr Brown did not accept that the original litigation leading to his bankruptcy was valid, and as a result did not accept that the bankruptcy proceedings were valid either. Mr Brown represented himself at all hearings and refused legal representation or assistance.

The Facts

Norton Aluminium Ltd (NAL) went into Administration following a partially successful nuisance claim against it and subsequently went into Liquidation. Mr Dickinson was the managing director and controlling shareholder and brought a claim to recover a secured loan made by him to NAL. The Liquidators counterclaimed to set aside or recover compensation for various transactions, including a share buyback from Mr Dickinson and connected parties by NAL for £2.5 million and the sale of a subsidiary to Mr Dickinson for £1.

A case of two companies, one incorporated in Dubai and the other in England, involved in a network of businesses producing contrived fancy colour diamond valuations were eventually wound up by English courts in the interest of the public.

(1) SIMON ROBERT THOMAS (2) ARRON KENDALL v (1) FROGMORE REAL ESTATE PARTNERS GP1 LTD (2) LINDA NICHOL (3) CHARLES SPARY (4) STUART JENKIN (5) NATIONWIDE BUILDING SOCIETY : (1) FROGMORE REAL ESTATE PARTNERS GP1 LTD (2) LINDA NICOL (3) CHARLES SPARY (4) STUART JENKIN v (1) SIMON ROBERT THOMAS (2) ARRON KENDALL (3) NATIONWIDE BUILDING SOCIETY sub noms (1) IN THE MATTER OF FREP (KNOWLE) LTD (IN ADMINISTRATION) (2) IN THE MATTER OF FREP (ELLESMERE PORT) LTD (IN ADMINISTRATION) (3) IN THE MATTER OF FREP (BELLE VALE) LTD (IN ADMINISTRATION) [2017] EWHC 25 (Ch)

This article was first published in The Gazette and the full article can be found online here.

As there is no clear definition in s.335A(3) of the Insolvency Act 1986 of what amounts to ‘exceptional circumstances’, the courts must apply the judgments of case law when determining whether to delay an order for possession and sale.

The US Bankruptcy Court for the Southern District of New York has dismissed a case filed under Chapter 15 of the US Bankruptcy Code as the debtor's centre of main interest ("COMI") was not in the jurisdiction where the initial Liquidation was filed.

Creative Finance Ltd was incorporated in the British Virgin Islands in 1995. However the Company's main trade occurred in England, Dubai and Spain. In December 2013 the Company filed for Liquidation in the BVI, being its place of incorporation, and a Liquidator was duly appointed.