Hammonds (a firm) v Pro-Fit USA Ltd

Hammonds (a firm) v Pro-Fit USA Ltd

The court is satisfied that Pro-Fit USA Ltd is unable or likely to become unable to pay its debts as they fall due. The existence of a disputed debt and cross-claim does not preclude the making of an administration order. The 2006 Licence raises a substantial argument of a transaction at undervalue, justifying the need for an independent administrator to investigate. The court exercises its discretion to make the administration order, subject to allowing USA an opportunity to surrender the 2006 Licence.

Parties
Applicant: Hammonds (a firm); Respondent: Pro-Fit USA Ltd
Jurisdiction
England and Wales
Judgment Date
17 August 2007
Procedural Posture
Administration Application / Judgment
Outcome
Administration order granted (conditional)
Legal Topics
Administration Orders, Transactions at Undervalue, Cross Claims and Set Off, Jurisdictional Issues in Insolvency, Professional Negligence
Insolvency Law Company Law Administration Orders Transactions at Undervalue Cross Claims and Set Off Jurisdictional Issues in Insolvency Professional Negligence

Case Brief

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Parties

Hammonds (a firm)

Applicant

Pro-Fit USA Ltd

Respondent

Procedural Posture

Administration Application / Judgment

Legal Issues

  1. 1 Whether the court should make an administration order against Pro-Fit USA Ltd on the application of Hammonds as creditor
  2. 2 Whether Hammonds is a creditor in light of a disputed debt and alleged cross-claim
  3. 3 Whether the 2006 Licence was a transaction at undervalue

Ratio Decidendi

The court is satisfied that Pro-Fit USA Ltd is unable or likely to become unable to pay its debts as they fall due. The existence of a disputed debt and cross-claim does not preclude the making of an administration order. The 2006 Licence raises a substantial argument of a transaction at undervalue, justifying the need for an independent administrator to investigate. The court exercises its discretion to make the administration order, subject to allowing USA an opportunity to surrender the 2006 Licence.

Court Disposition

Administration order granted (conditional)

Orders

  • Administration order to be made against Pro-Fit USA Ltd, subject to USA being given an opportunity to obtain a surrender of the 2006 Licence from International on proper terms.