Secretary of State for Business, Enterprise & Regulatory Reform v Charter Financial Solutions Ltd & Ors

Secretary of State for Business, Enterprise & Regulatory Reform v Charter Financial Solutions Ltd & Ors

The court found that FSUK and related companies had been operated with a serious lack of commercial probity, including making blatant misrepresentations, misleading franchisees and the public, and concealing adverse business history. The directors demonstrated a willingness to act beyond the boundaries of law and regulation until compelled to stop. There was insufficient evidence of voluntary change in business practices. The court exercised its discretion to make winding up orders in the public interest under section 124A of the Insolvency Act 1986.

Parties
Petitioner: The Secretary of State for Business, Enterprise and Regulatory Reform; Respondent: Charter Financial Solutions Limited; Respondent: Charter Financial Solutions (UK) Limited; Respondent: Finance Select (UK) Limited; Respondent: Bounce World Limited; Respondent: Trash Express (UK) Limited
Jurisdiction
England and Wales
Judgment Date
22 May 2009
Procedural Posture
Public Interest Company Winding Up Petition / Judgment After Trial
Outcome
Winding up orders granted
Legal Topics
Winding Up on Public Interest Grounds, Commercial Probity, Misrepresentation, Consumer Protection, Franchise Regulation
Company Law Insolvency Law Regulatory Law Winding Up on Public Interest Grounds Commercial Probity Misrepresentation Consumer Protection Franchise Regulation

Case Brief

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Parties

The Secretary of State for Business, Enterprise and Regulatory Reform

Petitioner

Charter Financial Solutions Limited

Respondent

Charter Financial Solutions (UK) Limited

Respondent

Finance Select (UK) Limited

Respondent

Bounce World Limited

Respondent

Trash Express (UK) Limited

Respondent

Procedural Posture

Public Interest Company Winding Up Petition / Judgment After Trial

Legal Issues

  1. 1 Whether Finance Select (UK) Limited (FSUK) and related companies should be wound up in the public interest under section 124A of the Insolvency Act 1986
  2. 2 Whether the business model and conduct of FSUK and related companies demonstrated a lack of commercial probity justifying winding up
  3. 3 Whether misleading statements and misrepresentations were made to franchisees and the public

Ratio Decidendi

The court found that FSUK and related companies had been operated with a serious lack of commercial probity, including making blatant misrepresentations, misleading franchisees and the public, and concealing adverse business history. The directors demonstrated a willingness to act beyond the boundaries of law and regulation until compelled to stop. There was insufficient evidence of voluntary change in business practices. The court exercised its discretion to make winding up orders in the public interest under section 124A of the Insolvency Act 1986.

Court Disposition

Winding up orders granted

Orders

  • Finance Select (UK) Limited (FSUK) to be wound up in the public interest
  • Charter Financial Solutions Limited (CFS) to be wound up