(Chancery Division, McCloskey J, 16 September 2013)
The ‘harm' contemplated in paragraph 75 of Schedule B1 to the Insolvency (Northern Ireland) Order 1989 is something of tangible detriment to an individual creditor vis-à-vis another creditor, or other creditors.
A creditor applied to challenge the decision of the administrator not to assign the benefit of legal proceedings issued by the company before it went into administration. Although there was a possibility that the non-pursuit of the proceedings could inflict some detriment on the creditor, that possible detriment did not constitute ‘unfair harm' because she would be no worse off than any other creditor or member of the company.
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(Chancery Division, Norris J, 16 October 2013)
The petitioner and the second respondent, who each held one share in the company, had had a personal relationship which came to an end. The petitioner presented a winding-up petition on the grounds that it was just and equitable that the company be wound up because its affairs had been conducted in a way that was unfairly prejudicial to her or that her relationship with the second respondent that was reflected in the company's constitution was now gone.
The court refused to make a winding-up order on the petition because although it was just and equitable that the company be wound up, the petitioner had an alternative remedy open to her; as a shareholder and director of the company, the petitioner had the right to demand repayment to her of her interest in a directors' loan account, following which she was bound to transfer her shareholding to the second respondent.
(Chancery Division, Richard Snowden QC (sitting as a deputy High Court judge), 25 October 2013)
The directors of a company retain a residuary power to cause the company to bring an application to challenge the appointment of administrators by a qualifying floating charge-holder pursuant to para 14 Sch B1 to the IA 1986. Such authority is not dependent on the provision by the directors of an indemnity for costs.
However, on the facts the qualifying floating charge-holder was not estopped from appointing administrators by indicating that it was open to settlement discussions.
(Court of Appeal, The Chancellor, 26 June 2013)
Mr and Mrs O'Donnell appealed to the Court of Appeal against orders made by Newey J on 21 December 2012 and 16 March 2013 whereby he dismissed bankruptcy petitions which the O'Donnells had presented to the English Courts on the grounds that their COMI for the purposes of the Insolvency Regulation (1346/2000) was in Ireland, and then refused to vary that order in the light of new evidence adduced by the O'Donnells. Rimer LJ declined to grant permission to appeal on paper. The O'Donnells renewed their application for permission orally before the Chancellor. They relied upon numerous grounds of appeal, including that Newey J had made errors of law and fact in his judgment. The Chancellor rejected all of the arguments put forward by the O'Donnells. He concluded that Newey J had adopted an entirely conventional approach to the law in relation to COMI, and that there was no basis for referring any questions to the CJEU, as the O'Donnells had requested. Permission to appeal was not granted.