Unidare Plc v Cohen & Anor [2005] EWHC 1410 (Ch) (01 July 2005)

Unidare Plc v Cohen & Anor [2005] EWHC 1410 (Ch) (01 July 2005)

Holdings, after execution of the declaration of trust, was not entitled to exercise or control voting power of the shares; thus, Unidare was not connected with the company when the debenture was executed. The debenture is valid and Unidare is a secured creditor. The administrator's actions in placing the company into liquidation were not unfair and were based on reasonable grounds.

Citation
[2005] EWHC 1410 (Ch)
Parties
Claimant: Unidare PLC; Defendant: Malcolm Cohen; Defendant: Dermot Power
Jurisdiction
England and Wales
Judgment Date
01 July 2005
Procedural Posture
Companies Court Application / Judgment After Contested Hearing
Outcome
Application under paragraph 73 dismissed; declaration granted that debenture is not avoided by section 245.
Legal Topics
Validity of Debenture, Connected Persons, Bare Trust, Voting Power, Administration to Liquidation
Insolvency Company Law Validity of Debenture Connected Persons Bare Trust Voting Power Administration to Liquidation

Case Brief

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Parties

Unidare PLC

Claimant

Malcolm Cohen

Defendant

Dermot Power

Defendant

Procedural Posture

Companies Court Application / Judgment After Contested Hearing

Legal Issues

  1. 1 Whether Unidare PLC was a secured creditor of Kilnoore Ltd
  2. 2 Whether Unidare was 'connected' with the company under Insolvency Act 1986 s.245
  3. 3 Whether the debenture was invalid due to lack of consideration or connection

Ratio Decidendi

Holdings, after execution of the declaration of trust, was not entitled to exercise or control voting power of the shares; thus, Unidare was not connected with the company when the debenture was executed. The debenture is valid and Unidare is a secured creditor. The administrator's actions in placing the company into liquidation were not unfair and were based on reasonable grounds.

Court Disposition

Application under paragraph 73 dismissed; declaration granted that debenture is not avoided by section 245.

Orders

  • Declaration that the debenture is not avoided by section 245 of the Insolvency Act 1986.
  • Dismissal of the application under paragraph 73.