Global Trader Europe Ltd, Re

Global Trader Europe Ltd, Re

Non-segregated clients (Rossib and Soukholinski classes) are unsecured creditors and have no proprietary claim to funds held by the liquidators, except to the extent they can trace specific client money. They are not entitled to share in the segregated client money fund (£2m plus), which is held solely for the Crawford-Brunt class. The incomplete transfer of £503,157.55 cannot be remedied by court order; the shortfall leaves the Crawford-Brunt class unsecured creditors for that sum. Profits arising on post-administration closings are not trust money and are only unsecured claims. Further shortfalls arising from notional closings at administration should be remedied by transfer from...

Parties
Applicants: Joanne Milner and Stephen Cork (liquidators of Global Trader Europe Limited); First Respondent (representative of Crawford Brunt Class): Andre Crawford-Brunt; Second Respondent (representative of Rossib Class): Rossib (Cyprus) Limited; Third Respondent (representative of Soukholinski Class): Sergey Soukholinsky; Fourth Respondent (representative of CFM Class): City Facilities Management Limited
Jurisdiction
England and Wales
Judgment Date
24 March 2009
Procedural Posture
Insolvency Application (liquidation) / Judgment on Application for Directions Under S.112 Insolvency Act 1986
Outcome
Application determined; directions given. Claims of Rossib and Soukholinski classes as trust beneficiaries rejected. Directions on further shortfalls and set-off granted.
Legal Topics
Client Money Rules, Statutory Trusts, Tracing, Distribution of Assets in Insolvency, Segregated Accounts, Title Transfer Collateral Arrangements, Set Off in Insolvency
Insolvency Financial Regulation Trusts Client Money Rules Statutory Trusts Tracing Distribution of Assets in Insolvency Segregated Accounts +2 more

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Parties

Joanne Milner and Stephen Cork (liquidators of Global Trader Europe Limited)

Applicants

Andre Crawford-Brunt

First Respondent (representative of Crawford Brunt Class)

Rossib (Cyprus) Limited

Second Respondent (representative of Rossib Class)

Sergey Soukholinsky

Third Respondent (representative of Soukholinski Class)

City Facilities Management Limited

Fourth Respondent (representative of CFM Class)

Procedural Posture

Insolvency Application (liquidation) / Judgment on Application for Directions Under S.112 Insolvency Act 1986

Legal Issues

  1. 1 Whether non-segregated clients (Rossib and Soukholinski classes) have proprietary claims to funds held by the liquidators or are merely unsecured creditors
  2. 2 Whether the Rossib and Soukholinski classes are entitled to share in the segregated client money fund (£2m plus)
  3. 3 Whether the liquidators should transfer £503,157.55 to the segregated account (incomplete transfer issue)

Ratio Decidendi

Non-segregated clients (Rossib and Soukholinski classes) are unsecured creditors and have no proprietary claim to funds held by the liquidators, except to the extent they can trace specific client money. They are not entitled to share in the segregated client money fund (£2m plus), which is held solely for the Crawford-Brunt class. The incomplete transfer of £503,157.55 cannot be remedied by court order; the shortfall leaves the Crawford-Brunt class unsecured creditors for that sum. Profits arising on post-administration closings are not trust money and are only unsecured claims. Further shortfalls arising from notional closings at administration should be remedied by transfer from...

Court Disposition

Application determined; directions given. Claims of Rossib and Soukholinski classes as trust beneficiaries rejected. Directions on further shortfalls and set-off granted.

Orders

  • Rossib and Soukholinski classes are unsecured creditors, not trust beneficiaries, except to the extent of any successful tracing claim.
  • Crawford-Brunt class are sole beneficiaries of the segregated fund (£2m plus).