MK Airlines Ltd, Re

MK Airlines Ltd, Re

The relevant test for whether an asset is subject to a paragraph 99 charge is legal entitlement at the time of cessation, not the administrator's actions. The $200,000 exclusivity deposit is part of the paragraph 99 pool as it is derived from assets already subject to the charge. The business rates refund is subject to the charge only if the right to the refund arose before cessation. The court may confer liquidators the powers to administer paragraph 99 assets and apply the Insolvency Rules to claims. 75% of the provisional liquidation costs are attributable to the paragraph 99 pool. Liquidators are entitled to time-based remuneration for work on paragraph 99 assets, with an interim...

Parties
Applicant (joint Liquidator of MK Airlines Limited): Stephen Katz; Applicant (joint Liquidator of MK Airlines Limited): John Alexander; Respondent (former Administrator of MK Airlines Limited): James Preston Bradney; Respondent (former Administrator of MK Airlines Limited): Andrew John Duncan; Respondent (former Administrator of MK Airlines Limited): Michael Jonathan Christopher Oldham; Respondent (subsequent Former Administrator, Provisional Liquidator, and Receiver of MK Airlines Limited): Kevin Hellard; Respondent (subsequent Former Administrator, Provisional Liquidator, and Receiver of MK Airlines Limited): Andrew Hosking; Respondent (administrator of MK Airlines Properties Limited): Matthew Cowlishaw; Respondent (administrator of MK Airlines Properties Limited): David Langton; Respondent (holding Company of MK Airlines Limited): Transatlantic Aviation Limited
Jurisdiction
England and Wales
Judgment Date
26 April 2012
Procedural Posture
Insolvency Application (directions in Liquidation) / Judgment on Application for Directions and Determination of Priorities
Outcome
Application allowed in part; directions and declarations granted as specified.
Legal Topics
Statutory Charges Under Paragraph 99 Schedule B1 Insolvency Act 1986, Liquidators' Powers and Remuneration, Priority of Claims in Insolvency, Allocation of Costs in Liquidation, Interpretation of 'custody or Control' in Insolvency Context
Insolvency Law Company Law Statutory Charges Under Paragraph 99 Schedule B1 Insolvency Act 1986 Liquidators' Powers and Remuneration Priority of Claims in Insolvency Allocation of Costs in Liquidation Interpretation of 'custody or Control' in Insolvency Context

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 13 Party arguments 2 Amounts and remedies 9
Sign in to unlock

Parties

Stephen Katz

Applicant (joint Liquidator of MK Airlines Limited)

John Alexander

Applicant (joint Liquidator of MK Airlines Limited)

James Preston Bradney

Respondent (former Administrator of MK Airlines Limited)

Andrew John Duncan

Respondent (former Administrator of MK Airlines Limited)

Michael Jonathan Christopher Oldham

Respondent (former Administrator of MK Airlines Limited)

Kevin Hellard

Respondent (subsequent Former Administrator, Provisional Liquidator, and Receiver of MK Airlines Limited)

Andrew Hosking

Respondent (subsequent Former Administrator, Provisional Liquidator, and Receiver of MK Airlines Limited)

Matthew Cowlishaw

Respondent (administrator of MK Airlines Properties Limited)

David Langton

Respondent (administrator of MK Airlines Properties Limited)

Transatlantic Aviation Limited

Respondent (holding Company of MK Airlines Limited)

Procedural Posture

Insolvency Application (directions in Liquidation) / Judgment on Application for Directions and Determination of Priorities

Legal Issues

  1. 1 Whether specific assets are subject to statutory charges under paragraph 99 Schedule B1 Insolvency Act 1986
  2. 2 Proper test for 'custody or control' of property for purposes of paragraph 99 charges
  3. 3 Liquidators' powers over assets subject to paragraph 99 charges

Ratio Decidendi

The relevant test for whether an asset is subject to a paragraph 99 charge is legal entitlement at the time of cessation, not the administrator's actions. The $200,000 exclusivity deposit is part of the paragraph 99 pool as it is derived from assets already subject to the charge. The business rates refund is subject to the charge only if the right to the refund arose before cessation. The court may confer liquidators the powers to administer paragraph 99 assets and apply the Insolvency Rules to claims. 75% of the provisional liquidation costs are attributable to the paragraph 99 pool. Liquidators are entitled to time-based remuneration for work on paragraph 99 assets, with an interim...

Court Disposition

Application allowed in part; directions and declarations granted as specified.

Orders

  • Declaration that the test for custody or control under paragraph 99 is legal entitlement to the property.
  • Declaration that the $200,000 exclusivity deposit is subject to the paragraph 99 charges.