Manolete Partners PLC v Bell & Ors (Re BSS LED [R&D] Ltd) [2024] EWHC 1636 (Ch) (28 June 2024)

Manolete Partners PLC v Bell & Ors (Re BSS LED [R&D] Ltd) [2024] EWHC 1636 (Ch) (28 June 2024)

Mr Bell breached his duty as director by transferring assets and making payments at undervalue and by preference to connected parties when BSS LED [R&D] Limited was insolvent, without proper consideration of creditors' interests; compensation ordered for losses caused.

Citation
[2024] EWHC 1636 (Ch)
Parties
Applicant/claimant: Manolete Partners PLC; Respondent/defendant: Mr Austin Bell; Respondent/defendant: Mr Christian Bell; Respondent/defendant: MSV Engineering Limited; Respondent/defendant: Mr Steven Bell
Jurisdiction
England and Wales
Judgment Date
28 June 2024
Procedural Posture
Hybrid Part 7 Claim and Section 238 Insolvency Act Application / Judgment After Trial
Outcome
Claim against Mr Bell succeeds; compensation ordered for losses caused by breach of duty and transactions at undervalue/preference.
Legal Topics
Transaction at Undervalue, Director's Duties, Preference, Creditor Interests, Breach of Fiduciary Duty
Insolvency Company Law Transaction at Undervalue Director's Duties Preference Creditor Interests Breach of Fiduciary Duty

Case Brief

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Parties

Manolete Partners PLC

Applicant/claimant

Mr Austin Bell

Respondent/defendant

Mr Christian Bell

Respondent/defendant

MSV Engineering Limited

Respondent/defendant

Mr Steven Bell

Respondent/defendant

Procedural Posture

Hybrid Part 7 Claim and Section 238 Insolvency Act Application / Judgment After Trial

Legal Issues

  1. 1 Whether assets and payments were transferred at undervalue or as preferences in breach of insolvency law
  2. 2 Whether director breached duty to creditors when company was insolvent
  3. 3 Whether payments to connected parties constituted preferences

Ratio Decidendi

Mr Bell breached his duty as director by transferring assets and making payments at undervalue and by preference to connected parties when BSS LED [R&D] Limited was insolvent, without proper consideration of creditors' interests; compensation ordered for losses caused.

Court Disposition

Claim against Mr Bell succeeds; compensation ordered for losses caused by breach of duty and transactions at undervalue/preference.

Orders

  • Mr Bell to pay compensation for sale of equipment to Engineering at undervalue (£65,000).
  • Mr Bell to pay compensation for payments to Manufacturing (£143,139.90).