Manning & Anor v Neste AB & Anor (Re Bitumina Industries Ltd) [2022] EWHC 2578 (Ch) (12 October 2022)

Manning & Anor v Neste AB & Anor (Re Bitumina Industries Ltd) [2022] EWHC 2578 (Ch) (12 October 2022)

The floating charge granted to the Second Respondent was valid to the extent of the value of the shares in DMCC transferred to the Company at the time of the charge's creation, as such shares constituted 'goods' for the purposes of s.245 Insolvency Act 1986. The charge was not invalidated by s.245, but the precise value of the consideration (shares) may require further determination if not agreed. Subsequent renegotiation and note exchange did not constitute new consideration or discharge of debt for s.245 purposes.

Citation
[2022] EWHC 2578 (Ch)
Parties
Applicant: Lee Manning; Applicant: Cameron Frazer Gunn; First Respondent: Neste AB; Second Respondent: Rami Farah
Jurisdiction
England and Wales
Judgment Date
12 October 2022
Procedural Posture
Insolvency Application for Directions / Judgment on Application for Directions Regarding Validity and Enforceability of Floating Charge
Outcome
Directions granted; charge valid to the extent of value of shares transferred; further hearing may be required to determine value if not agreed.
Legal Topics
Validity of Floating Charge, Section 245 Insolvency Act 1986, Consideration for Security, Registration of Charges, Connected Persons, Valuation of Consideration
Insolvency Law Company Law Validity of Floating Charge Section 245 Insolvency Act 1986 Consideration for Security Registration of Charges Connected Persons Valuation of Consideration

Case Brief

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Parties

Lee Manning

Applicant

Cameron Frazer Gunn

Applicant

Neste AB

First Respondent

Rami Farah

Second Respondent

Procedural Posture

Insolvency Application for Directions / Judgment on Application for Directions Regarding Validity and Enforceability of Floating Charge

Legal Issues

  1. 1 Whether the floating charge granted to the Second Respondent is invalidated by s.245 of the Insolvency Act 1986
  2. 2 Whether the transfer of shares in DMCC constitutes eligible consideration under s.245
  3. 3 Whether subsequent renegotiation or note exchange constitutes new consideration or discharge of debt under s.245

Ratio Decidendi

The floating charge granted to the Second Respondent was valid to the extent of the value of the shares in DMCC transferred to the Company at the time of the charge's creation, as such shares constituted 'goods' for the purposes of s.245 Insolvency Act 1986. The charge was not invalidated by s.245, but the precise value of the consideration (shares) may require further determination if not agreed. Subsequent renegotiation and note exchange did not constitute new consideration or discharge of debt for s.245 purposes.

Court Disposition

Directions granted; charge valid to the extent of value of shares transferred; further hearing may be required to determine value if not agreed.

Orders

  • Declaration that the floating charge is valid to the extent of the value of the shares in DMCC transferred at the time of creation of the charge.
  • If parties cannot agree the value of the consideration, the matter to be listed for further hearing to determine value.