The Virgin Active restructuring plan judgment was released last week, with a resounding win for Virgin Active over the opposing landlords. Melanie Leech, on behalf of the British Property Federation, said, "This Restructuring Plan sets a dangerous precedent and demonstrates how the law is now allowing wealthy individuals and private equity backers to extract value from their businesses in good times but later claim insolvency, as simply a means to get out of their contractual obligations with property owners.

Background:

Creditor not obliged to take steps in foreign proceedings to preserve security

In our update this month we take a look at a case in which a non-party costs order was made against a major shareholder in the insolvent claimant company. The court found that the shareholder was the real party to the litigation; it funded the litigation, it was exercising control over the litigation and it would have been the main beneficiary had the litigation succeeded. We cover this, and other issues affecting the insolvency and fraud industry:

Montpelier Business Reorganisation Ltd v Jones & Others (2017)

Background

37026  Steven Paul Boone v. Her Majesty the Queen

(Ont.)

Criminal law – Offences – Elements of offence

36039 Dhillon v. Jaffer  (Law of professions – Barristers and solicitors – Breach of fiduciary duty – Damages)

The recent decision in BNY Corporate Trustee Services Limited v Eurosail - UK 2007 - 3BL PLC (Eurosail) has provided helpful guidance on the interpretation of the insolvency tests set out in section 123 of the Insolvency Act 1986. This guidance is not only relevant to companies with financial problems. The common practice of drafting contractual events of default by reference to section 123 means that it has significance to anyone who is creating or is party to contracts (whether finance documents or other commercial contracts) containing this type of provision.

In circumstances where a debtor lacks mental capacity to deal with a statutory demand and subsequent bankruptcy petition, the court will rescind or annul a bankruptcy order.

Justice has to be seen to be done. Without clear reasons from the court as to the decision it reached, a party is entitled to have reheard issues it raised on an earlier application but which there is no evidence the court considered.

An intervening bankruptcy will not defeat a charging order where the bankruptcy was entered into in an attempt to frustrate the charge.