Lee Manning & Anor v Neste AB & Anor

Lee Manning & Anor v Neste AB & Anor

The floating charge was validly created and effective against the joint administrators, as the transfer of shares in DMCC constituted consideration within the meaning of s.245 of the Insolvency Act 1986. The charge was not invalidated by s.245(2)(a) at the date of its creation and is valid to the extent of the value derived by the company from its acquisition of the shares. Subsequent renegotiations, note exchanges, or release of funds did not constitute new consideration or discharge of debt under s.245.

Parties
Applicant: Lee Manning; Applicant: Cameron Frazer Gunn; Respondent: Neste AB; 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 a Floating Charge
Outcome
Directions granted; charge held valid to the extent of value received for DMCC shares; no further validation from subsequent transactions.
Legal Topics
Floating Charges, Connected Persons, Consideration Under Insolvency Law, Registration of Charges, Debt Restructuring, Valuation of Consideration
Insolvency Law Company Law Floating Charges Connected Persons Consideration Under Insolvency Law Registration of Charges Debt Restructuring Valuation of Consideration

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Parties

Lee Manning

Applicant

Cameron Frazer Gunn

Applicant

Neste AB

Respondent

Rami Farah

Respondent

Procedural Posture

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

Legal Issues

  1. 1 Whether the floating charge granted to a connected person is valid and enforceable under s.245 of the Insolvency Act 1986
  2. 2 Whether the consideration given for the charge satisfies the statutory requirements
  3. 3 Whether subsequent renegotiations or note exchanges constitute new consideration or discharge of debt under s.245

Ratio Decidendi

The floating charge was validly created and effective against the joint administrators, as the transfer of shares in DMCC constituted consideration within the meaning of s.245 of the Insolvency Act 1986. The charge was not invalidated by s.245(2)(a) at the date of its creation and is valid to the extent of the value derived by the company from its acquisition of the shares. Subsequent renegotiations, note exchanges, or release of funds did not constitute new consideration or discharge of debt under s.245.

Court Disposition

Directions granted; charge held valid to the extent of value received for DMCC shares; no further validation from subsequent transactions.

Orders

  • The Charge was a validly created security, effective against the Joint Administrators.
  • The Charge was not invalidated by s.245(2)(a) at the date of its creation, and is valid to the extent of the value derived by the Company from its acquisition of the shares of DMCC.