This series looks at the enforcement options available to creditors to recover sums due by a debtor in Scotland. In previous editions we looked at the remedies of Inhibition and Earnings Arrestment.
This week:
Court imposes compensation order on disqualified director
The court has ordered a disqualified director of an insolvent company to pay personal compensation to creditors.
What matters
This article delves into some key considerations for suppliers when dealing with customers where there may be a risk of non-payment or insolvency circumstances and how a supplier can minimise the risk to their cash flow and business.
What matters next
The court orders a disqualified director of an insolvent company to pay personal compensation to creditors.
This is only the second time the courts have considered a personal compensation order against a disqualified director since their introduction in 2015.
What happened?
Secretary of State v Barnsby [2023] EWHC 2284 (Ch) concerned an individual who was the sole director and majority shareholder of a company that sold package holidays.
The Court of Appeal has given valuable and clear guidance on the circumstances in which applications during an ongoing liquidation may constitute ‘final decisions’ for the purpose of bringing appeals to His Majesty in Council pursuant to the Virgin Islands (Appeals to Privy Council) Order 1967 ( the “1967 Order”). The issue can be an important one in practice – final decisions only require formal or procedural permission to appeal, whereas non-final decisions require substantive permission, based on merit or public importance.
Even if the statutory conditions for cramming down the votes of dissenting creditors has been met, the court retains a discretion to consider other factors
Certain statutory conditions need to be met in order for the court to sanction a plan at least one class of creditors or members has not voted in favour of the plan by the requisite majority (being 75% in value of those present and voting) – referred to as the "cross-class cram down".
In an eagerly-awaited and significant decision, the Supreme Court, in R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others [2023] UKSC 28 (“PACCAR”), held, on 26 July 2023, that litigation funding agreements (“LFAs”) under which a litigation funder receives a percentage of any damages recovered by the claimant are damages-based agreements (“DBAs”) within the meaning of section 58AA of the Courts and Legal Services Act 190 (“CLSA”).
In Secretary of State for Business, Energy And Industrial Strategy v Barnsby [2022] EWHC 971 (Ch) ICC Judge Barber imposed a seven year disqualification period on the defendant arising out of his conduct as a director of Pure Zanzibar Ltd. Her latest judgment in the same case ([2023] EWHC 2284 (Ch)) deals with the Secretary of State’s claim for a compensation order under section 15A Company Directors Disqualification Act 1986.
When seeking to recover arrears under a lease, it is often possible to act to recover funds without the need for a court order. If a lease has been registered for preservation and execution in the Books of Council and Session, a creditor can normally move to instruct Sheriff Officers to recover the funds. This procedure is known as summary diligence and can take several forms.
一、背景介绍
本案1中的被告、破产债务人美国航运公司（United States Lines Inc.，以下简称 USL）在世界各地长期经营庞大的海运业务。公司在美国特拉华州注册成立，后将业务拓展到英国，控股公司为在纽约注册的麦克莱恩工业公司（McLean Industries Inc.）。1986年，USL根据《美国破产法》第11章的规定，于11月24日提出破产申请。同日，美国纽约南区的地方破产法庭（以下简称美国破产法庭）的布施曼（Buschman）法官作出临时禁令并指定债务人托管人。USL的申请内容显示：公司资产共计12.5亿美元，总债务为12.72亿美元，负债金额超过资产的102%。而在英国，其欠下的总债务（已经清算的债务）达到243.4万英镑（包括拖欠原告的债务），资产约为72万英镑，债务超过资产的3倍，严重资不抵债。鉴于此，USL根据《美国破产法》第11章的规定进行重整，并计划完全关闭公司在英国和欧洲的运营。