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Insolvency and Restructuring

We have dealt with some of the largest insolvency cases in the English Courts of recent years, including:

  • Successfully defending the €1bn claim in Hosking v Apax Partners LLP on behalf of 34 of the 48 respondents, in which the liquidators alleged fraudulent trading and transactions to put assets beyond the reach of creditors.
  • Bringing claims for US$800m in respect of dividends paid out by a company that were said not to take proper account of the company’s contingent creditors and to amount to putting assets beyond the reach of creditors.

The firm’s experience includes:

    • Advising creditors on options available to them in respect of distressed debt;
    • Advising directors and stakeholders on their options in the twilight of an insolvency;
    • Advising insolvency practitioners, directors, creditors and stakeholders in relation to all insolvency processes including liquidation, administration, bankruptcies, company voluntary arrangements and individual voluntary arrangements; including:
      • Statutory demands, winding-up and bankruptcy applications;
      • Claims for breach of directors’ duties, fraud arising out of insolvency and claims pursuant to officeholder’s statutory powers;
      • Cross-border and offshore insolvencies (our lawyers have experience of project managing multijurisdictional disputes and are used to working with other law firms around the world including in the US, Russia, South America, the BVI, Cayman, Jersey and the Isle of Man);
      • liquidation and administration expenses; and
      • disputes between creditors and officeholders;
  • Receiverships;
  • Mediation in relation to insolvency disputes; and
  • Restoration of dissolved companies.

Selected Case Summaries

PCB’s defence on behalf of 33 respondents to a €1bn claim culminated in PCB’s clients being awarded indemnity costs. The Claimants’ case had collapsed after 4 days of a 6 week trial, but the Judge considered he was in a position to assess in broad terms the reasonableness of the pursuit and the manner of presentation of the proceedings, to determine in all the circumstances already apparent to the Court whether the case was such as fairly and properly to be characterised as “out of the norm”. He concluded that this had been high-risk litigation, aggressively and very expensively pursued and that it was taken out of the norm by factors including (1) the pursuit of serious allegations of commercial impropriety which were suddenly abandoned without explanation; (2) the changing nature and inconsistencies in the case; and (3) the publicity attending the case.  

PCB acted for the 9th to 42nd respondents in this €1bn claim brought by the liquidators of a Greek Telecommunications company against private equity interests under s423 of the Insolvency Act 1986. The litigation had originally been brought in the US, but was stayed on forum grounds at a relatively late stage in favour of England. The consequence was that at an early stage of the English proceedings, the parties agreed that the disclosure given in the US proceedings should stand as disclosure in the English proceedings. Subsequently, the liquidators sought that the respondents should undertake additional searches for documents. However, in view of the agreement previously reached, the evidence as to the careful steps taken in the US proceedings to ensure appropriate searches were undertaken for documents and the lack of any evidence that there were missing documents likely to be found, the Court declined the liquidators’ application.

PCB acted for the second defendant to a claim to enforce a charge granted over a house. The claim was defended on the basis that the charge amounted to a regulated mortgage contract which the claimant was not licensed to provide, that the charge was void under s284 of the Insolvency Act 1986 and that it had been procured by undue influence and that the house was in any event held on trust for the defendants’ daughter. The second defendant counterclaimed for a declaration that the charge was unenforceable, void or voidable and for it to be set aside. The claimant failed to file a defence to the counterclaim and judgment in default was granted, setting aside the charge and declaring it void. PCB successfully opposed an application to set aside the default judgment.

PCB acted for a respondent to a claim brought by liquidators of a Greek telecommunications company, who alleged that the respondent (one of the world’s largest private equity funds) had sought to put approximately €1bn of assets beyond the reach of creditors and had traded fraudulently. The claims were brought pursuant to sections 213 and 423 of the Insolvency Act 1986. At the same time parallel proceedings were being pursued in New York against related parties. The liquidators sought a stay of the English proceedings until after the final outcome of the New York proceedings. PCB successfully opposed the stay application.

PCB were instructed by the receiver of a convicted tax fraudster to collect in his worldwide assets to satisfy a confiscation order. One asset was a claim in the name of an Irish company which had been dissolved and struck off. PCB applied to restore the company but, as there was a potential limitation defence that might arise whilst the company was being restored, PCB obtained permission to bring proceedings in the name of the dissolved company. PCB successfully resisted a challenge in the Court of Appeal to the grant of that permission.

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