Watchorn v Jupiter Industries Ltd

Watchorn v Jupiter Industries Ltd

The assignment of trademarks by Husky Group Limited to Jupiter Industries Limited for £1 was a transaction at an undervalue and was entered into for the substantial purpose of putting assets beyond the reach of creditors, contrary to section 423 of the Insolvency Act 1986. Jupiter failed to prove that Husky Group Limited was solvent at the material time, so relief is also granted under section 238. The appropriate remedy is an award of £360,000, representing the going concern value of the trademarks at the date of transfer, together with interest and indemnity costs.

Parties
Claimant: David John Watchorn (Liquidator of Husky Group Limited - in creditors' voluntary liquidation); Defendant: Jupiter Industries Limited
Jurisdiction
England and Wales
Judgment Date
11 July 2014
Procedural Posture
Civil Insolvency / Judgment After Trial
Outcome
Claim allowed for the claimant (liquidator).
Legal Topics
Transaction at Undervalue, Transactions Defrauding Creditors, Assignment of Trademarks, Corporate Governance, Liquidation, Damages, Costs and Interest
Insolvency Company Law Commercial Law Transaction at Undervalue Transactions Defrauding Creditors Assignment of Trademarks Corporate Governance Liquidation +2 more

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Parties

David John Watchorn (Liquidator of Husky Group Limited - in creditors' voluntary liquidation)

Claimant

Jupiter Industries Limited

Defendant

Procedural Posture

Civil Insolvency / Judgment After Trial

Legal Issues

  1. 1 Whether the assignment of trademarks from Husky Group Limited to Jupiter Industries Limited was a transaction at an undervalue under section 238 of the Insolvency Act 1986
  2. 2 Whether the assignment was a transaction defrauding creditors under section 423 of the Insolvency Act 1986
  3. 3 Whether Husky Group Limited was solvent at the material time

Ratio Decidendi

The assignment of trademarks by Husky Group Limited to Jupiter Industries Limited for £1 was a transaction at an undervalue and was entered into for the substantial purpose of putting assets beyond the reach of creditors, contrary to section 423 of the Insolvency Act 1986. Jupiter failed to prove that Husky Group Limited was solvent at the material time, so relief is also granted under section 238. The appropriate remedy is an award of £360,000, representing the going concern value of the trademarks at the date of transfer, together with interest and indemnity costs.

Court Disposition

Claim allowed for the claimant (liquidator).

Orders

  • Jupiter Industries Limited to pay £360,000 to the liquidator as the value of the trademarks.
  • Statutory interest at 3% above base from 11 November 2008 to 9 January 2014, and at 10% above base thereafter to judgment.