The transition from a family business to a family office can be treacherous. In a family business, the family is still involved in the day-to-day operations of the business and is literally “watching the store.” In a family office, the day-to-day operation of the family business and other financial investments and endeavors of the family may be delegated to experts outside of the family. This should create an enhanced level of professionalism and provide institutional safeguards and protections for the family, but can backfire.
Bilta (UK) Ltd in liquidation) & others v Muhammad Nazir & others [30.07.12]
High Court refuses to accept that a claim by an insolvent one-man company against its director for breach of his duties would be barred by ex turpi causa.
Bilta had two directors, one of whom owned all the company’s issued shares, effectively making it a "one-man company". The directors used Bilta to perpetrate a huge VAT fraud which left the company owing £38 million to HMRC. As a result, it was placed into insolvent liquidation.
- Jackson reforms will go ahead in April 2013
The new Master of the Rolls, Lord Dyson, has confirmed that the Jackson reforms will come into force in April 2013, scotching rumours that the legislative process would not be completed in time. He emphasised the importance of the Court of Appeal's role in implementing the reforms, maintaining consistency and minimising satellite litigation, urging the court to "speak clearly through [its] judgments in explaining how the reforms are intended to operate". He also described the issue of costs management
Introduction
In the recent High Court decision in Bilta (UK) Ltd (In liquidation) and others v Nazir and others [2012] EWHC (Ch), the court considered the application of the legal doctrine of ‘ex turpi causa non oritur actio’ in the context of fraud.
Facts
In 2006, a subsidiary of a Brazilian company issued US$100 million in principal amount of notes, guaranteed by its parent and constituted by a trust deed.
As noted in our July 2010 newsletter, lawyers are not immune from the recession.
A facilitation payment to encourage creditors to vote through the restructuring proposals of creditors’ debts has been held by the High Court not to be an illegal bribe. The court had regard to the fact that the offer of payment was made openly to all relevant creditors, none of whom were prevented from voting on the proposal. As such, where a creditor consented and received the facilitation payment, this was not contrary to the pari passu principle.
The facts
The Sinclair v Versailles1 decision has extinguished any prospect that a victim of a fraud has a proprietary claim to a fraudster’s secret profits. It also offers significant comfort to banks, insolvency practitioners and other potential recipients of trust funds by setting a high bar for whether a recipient person is “on notice” of a proprietary claim to those funds.
In relation to insolvent liquidations under U.K. law, one of the primary objectives will be the implementation of an efficient process to preserve and recover assets for the benefit of the creditors. This is particularly so where there is a need to instigate costly litigation or cross-border recognition proceedings and where the liquidator will want increased assurances as to the likelihood that those steps will generate positive returns.
On 21 May 2010, Justice Floyd handed down his judgment in Bloomsbury International Ltd (in administration) v Mark Alan Holyoake.1 The case sheds light on the circumstances in which it is appropriate for a cross-undertaking provided by administrators on behalf of an insolvent company to be fortifi ed by a bank guarantee.
Facts