Wrongful Trading is Back!
Wrongful Trading is back! The suspension of Wrongful Trading ended on 30 September 2020. The suspension that took effect from March this year is now no longer in force. The…
What is a Winding Up Petition?
What is a Winding Up Petition? What is a Winding Up Petition? A winding up petition is a legal process taken by creditors against a company that owes them a…
How to Spot Fraud
How to Spot Fraud How to spot fraud. Fraud is usually a simple thing to spot. Fraud by its nature may sound sophisticated but in reality, it can often be…
What is a Preference?
What is a Preference? What is a preference? In simple terms a preference is a transaction that results in a party being placed into a better position than they otherwise would…
Real People Go to Court
Real People Go to Court Real people go to court (including the court’s own officers), not fictional ‘reasonable’ characters that may populate the so-called legal village as creatures of judgments…
Director Not Necessarily an Agent
Director Not Necessarily an Agent Director not necessarily an agent was considered in the case of Poole v Hinton [2019] EWHC 2331 (Ch). The case concerned the setting aside of…
Liquidator’s duty of Confidentiality and Privacy: Company Records
Liquidator’s duty of Confidentiality and Privacy: Company Records A Liquidator’s duty of confidentiality and privacy where company records is concerned sprouted in the case of Henderson v Walker [2019] NZHC…
Directors do not need to be Accountants
Directors do not need to be Accountants Unlawful Dividends In the matter of Burnden Holdings (UK) Ltd v Fielding & Anor [2019] EWHC 1566 (Ch) Mr Zacaroli when considering if…
Insolvency Practitioners could be excused from cross examination?
Insolvency Practitioners could be excused from cross examination? Insolvency Practitioners could be excused from cross examination – as a proposition this is confined to claims where the Insolvency Practitioner is…
Insolvency Practitioners deserve huge pat on the back from creditors?
Contentious Recoveries for Creditors Certainly not, I envisage many of you might say! Let’s have a look at the Insolvency Practitioner who puts his neck on the line seeking to…
Director Misfeasance: there’s no “might” about it
Director Liability for Misfeasance Fail 100% as a Director to protect the company from the loss suffered, then you ‘might’ well find yourself ordered to pay 100% of that loss,…
Liquidator Removal: Open Your Eyes and See
The removal of a Liquidator requires just cause. If the Liquidator has generally been honest and effective the Court is unlikely to remove him or her. It is not intended…
Bankruptcy’s not so clean slate
In the matter of Oraki v Hall [2019] EWHC 1515 (Ch) the continuing litigation in this rather unfortunate bankruptcy appears to continue. It was now the turn of HHJ Simon…
Putting the Creditors First
It is a classic paradox that the whole insolvency process is underpinned by the interests of creditors. However, the remarkable irony is that creditors although considered the primary stakeholder in…
Failure to Safeguard Estate Monies
An apparent failure to safeguard estate monies leads to a 9 year and 7 year ban for two Directors who had IVA and Protected Trust Deed clients. The sums at…
Insolvency is a Class Remedy
In the matter of Fraser Turner Ltd v Pricewaterhousecoopers LLP & Ors [2019] EWCA Civ 1290 which can be read here https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWCA/Civ/2019/1290.html&query=(insolvency)+AND+(is)+AND+(a)+AND+(class)+AND+(action) the Court held that the general body of…
Court not bound by Nominee
In the matter of CFL Finance Ltd v Bass (Good faith to voluntary arrangements : consumer credit law) [2019] EWHC 1839 https://www.bailii.org/ew/cases/EWHC/Ch/2019/1839.html the Court suggested that the investigations undertaken by…
Creditors believe that they are unlikely to obtain returns from an insolvency
The answer could be as a result of matters of belief reinforcing the outcome. If you believe that you are unlikely to receive a distribution in a liquidation or from a…
In the Director’s Personal Name and on the Balance Sheet?
An asset on your company’s balance sheet is likely to be a reasonably good indication of some form of ownership even if the legal title to the asset is held…
Insolvency Act Powers – Reaching for the Section 236 pen; does the 234 one instead have more ink?
I was reading a judgment earlier this week in which there was reference to a liquidator’s so-called powers to obtain information to thereby investigate. This article looks at a hypothetical…
Asset-creating liquidator deserving of a pat on the back
The case of Walker Morris v Khalastchi [2001] 1 BCLC involved a liquidator’s refusal to afford a firm of solicitors an undertaking not to release documents from files they were to…
Can Two Wrongs make a Right? Bankruptcy Order from Judgment by Fraud
THE CASE The case of Oraki v Dean & Dean [2017] EWHC 11 (Ch) is a remarkable bankruptcy case that has already been before the Court in the matter of…
The Proof of Debt and 'spinning top'
THE CASE This is another case of a Liquidator’s rejection of a creditor’s Proof of Debt being overturned by the Court. The case of Ecology Support Services [2017] EWHC 160…
The Proof and the Burden: Court overturns a Liquidator's rejection of a creditor's Proof of Debt
THE CASE The case of Field v Hunt [2017] EWHC 247 (Ch) involved a Liquidator’s rejection of a creditor’s Proof of Debt (“the Proof”). It considered the Proof and the burden…
Shlosberg v Avonwick Holdings Ltd [2016] EWHC 1001 (Ch): privilege and an injunction requiring solicitors to cease acting
Disclaimer: This is not legal advice and is not to be relied upon as such. No liability is accepted by the writer for any reliance placed on the same. If you have…
VAT: planning restriction for use for holiday purposes prevents use as the person principal private residence
TC00898: DAVID TRATHEN (1) VAUGHAN GOODE (2) [2011] UKFTT 21 (TC) 1. These are appeals by Mr David Trathen and Mr Vaughan Goode as recipients of supplies of holiday accom-modation…
Green v Stadler: A Case of Non Est Factum
Green v Stadler (unreported) 4 December 2015 This is an interesting case in which the Court did not uphold the application of the Trustee in Bankruptcy, who sought to rely upon the…
The Shifting Burden: Green v Raja 2015 EWHC 3931 (CH)
The interesting feature of this case is the position considered in relation to payments challenged from a company that later went into liquidation. The Court said that the burden shifted back to the…
Payments from a Company: The Swinging Pendulum of Director Liability
Checklist of Considerations Is the payment for the director personally or the company? Is the payment in the best interests of the company from an objective vantage point? Can the company…
De Facto Director – Key Issues
No statutory definition for this, but some assistance maybe found in s.250 of the Companies Act 2006, (“CA06”): ‘In the Companies Acts “director” includes any person occupying the position of…
Green v Eltai [2015] BPIR 24
MR REGISTRAR JONES: A) A Summary of the Applicant’s Case and Evidence in Support A1) The Beneficial Interest Claims 1. This trial concerns the purchase on 9 May 2008 of…
Section 386 Companies Act 2006: What are adequate accounting records?
What does statute intend by the need to keep adequate accounting records, that are sufficient to show and explain the company’s transactions, such that they show with reasonable accuracy the…
Liquidators lacking finance not good enough…
A common issue (by definition) facing liquidators is a lack of money for investigatory purposes. Is this really a good reason for not undertaking a thorough investigation? Apparently not because…
Section 236 (Emails): Opportunity v Oppression
The job of the liquidator is to: – discover the truth of the company’s demise and report those findings to creditors; and – get in, realise and distribute the assets…
Section 236: speculation, fishing and oppression
A number of obstacles can affect a liquidator’s ability to obtain the information he or she considers is required in the execution of the statutory function to get in, realise…
Creditors' Right to Requisition Meetings – the 25% threshold …
Any scheme (if any were to arise) that makes it more difficult for creditors to appoint an IP as liquidator / trustee in bankruptcy (if that is their wish and statutory right…
Costs of Section 236 Compliance
In Re Harvest Finance Ltd (In Liquidation); Jackson and another v Cannons Law Practice LLP and others [2014] EWHC 4237 (Ch), [2014] All ER (D) 216 (Dec) at paragraphs [44]…
Do not divorce yourself from your creditors
The recent decision in Green (Trustee in Bankruptcy of Robert John Austin) v Georgina Austin [2014] BPIR 1176 seems to represent some good news for the Trustee in Bankruptcy, when seeking…
Liquidator Removal Case in Australia
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v GLENN J FRANKLIN, STIRLING L HORNE, JASON G STONE, WALTON CONSTRUCTION PTY LTD (ACN 060 900 218) (IN LIQ) and WALTON CONSTRUCTION (QLD) PTY…
Jackson & Anor v Baker Tilly & Anor [2014] EWHC 1134 (Ch)
In this case accountants were ordered to produce information to the Liquidators by His Honour Judge Mark Raeside QC. The respondents drew the court’s attention to the matter of Green…
Do the Civil Procedure Rules really achieve the Overriding Objective?
My view is perhaps best reflected in the comment of Mr Justice Lightman in his conclusions in the matter of Evans v SMG Television and others [2003] All ER (D)…
What do Credit Managers want from Insolvency Practitioners – better information, better dividends and for less fees?
In a significant proportion of cases save for the large insolvencies, although creditors technically appoint the IP, in voluntary liquidations and administrations the appointment of the IP often results via…
Obtaining Advisers' Files (update re Costs) – responding if there is reluctance to assist you …
My earlier posting on this subject indicated as a first step the way you might look to obtain files from former (or even current) advisers. So what happens if for…
Obtaining Advisers' Files (update re Privilege and Confidentiality) – responding if there is reluctance to assist you …
My earlier posting on this subject indicated as a first step the way you might look to obtain files from former (or even current) advisers. So what happens if for…
Obtaining Advisers' Files
Below is a template letter as a starting point for obtaining the files of any advisers who may have acted for you such as legal, accounting and other advisers: Dear…
Section 236: Unfocused fishing expeditions or just fact finding missions…
A Liquidator enters office as a relative stranger to the events of the insolvent company. It is axiomatic that he or she cannot put the jigsaw puzzle together without the…
The First Duty of a Liquidator
In the matter of Re Southern Pacific Personal Loans Limited [2013] EWHC 2485 (Ch) it was considered whether or not Liquidators were data controllers for the purpose of personal data…
Directors' Duties – Company Records
Director have duties pursuant to Section 386 of the Companies Act 2006 (formerly Section 221 of the Companies Act 1985) in relation to maintaining and retaining adequate accounting records. Case…
In pursuit of the auditors' files
An Auditor is deemed to be an Officer of a company (R v Shacter – [1960] 1 All ER 61). Put simply, the Auditor’s role is to report to the…
In pursuit of the accountants' files – update
In my earlier post on this subject I set out that in many instances accountants will act in the capacity as agent for the client, such as in relation to…
Avoiding abuse of liquidation to defeat a landlord or contingent creditors
The Contingent Claims A contingent or prospective creditor has been defined as someone with the standing as a creditor to wind up a company, as a “person [or entity] towards…
In pursuit of the accountants' files
I frequently seek out the files of a company’s accountants for which I am liquidator and often seem to have to go to some considerable lengths to justify the demand…
Our Working Papers or the Clients??
Many of us believe (incorrectly) that as accountants, the files we create in relation to our engagements and retainers are our own property. As a Licensed Insolvency Practitioner, I am…
Directors remuneration – beware of backdating your dividends because…
What is cheap now can be expensive later. The backdated dividend might not be uncommon and I might be forgiven for thinking that it might even be widespread but it…
Unlawful dividends and some case law
Dividend can be declared provided: – the company has sufficient distributable reserves as defined generally in Section 830 of the Companies Act 2006 – determination of the existence of sufficient…
Liquidator’s entitlement to accountant’s files
It never ceases to amaze me the number of professional qualified accountants who believe that the files that they create are their own property. A company accountant is usually employed…
Preference or invalid set-off: which is it?
Preferences are defined in Section 239 of the Insolvency Act 1986 and arise when one creditor is placed into a better position to that of another, when an individual or…
Hooper v Duncan Lewis (Solicitors) Ltd & Ors [2010] BPIR 591
The ability of the Trustee in Bankruptcy or Liquidator to apply to Court for orders of disclosure and private examination is a powerful weapon in the armoury of an Insolvency…
Green v Bramston & Ors [2010] EWHC 3106 (Ch) (02 December 2010)
In Green v Bramston & Ors [2010] EWHC 3106 (Ch) (02 December 2010) the principles set out in Berkeley Applegate (Re Berkeley Applegate (Investment Consultants) Ltd [1989] 1 Ch 32)…
Green v Ireland [2011] EWHC 1305 (Ch) (20 May 2011)
This is a case in which as Liquidator, I applied to the Court for relief that the granting of a charge at a relevant time in favour of the Respondent…
The end of the balance sheet test for solvency?
Unless there is good reason shown to the contrary it was largely considered that Section 123(2) of the Insolvency Act 1986 was in effect a balance sheet test for solvency,…
Insolvency Fees
There has been discussion regarding the remuneration of insolvency practitioners with some commentators even suggesting an independent body to oversee and review the same. Part of the problem appears to…
Liquidator’s Duty to Fish and Investigate
Do not take my word for it but consider the following persuasive authorities on the subject of the obligations of a Liquidator (or Administrator) to investigate: “…to do everything within…
Fishing for creatures in ponds that you do not even know exist
A liquidator enters his or her office as a stranger, having had no prior knowledge of the company’s affairs to which they are chosen by creditors to liquidate. Indeed a…
Wrongful Trading or Insolvent Trading, which is the unlawful act?
The short answer is Wrongful Trading is the unlawful act as set out in Section 214 of the Insolvency Act 1986. Insolvent Trading or trading whilst insolvent would be part…
