Malcolm Cohen & Anor v Co-Operative Group Limited & Ors

Malcolm Cohen & Anor v Co-Operative Group Limited & Ors

Withdrawals of share capital by a registered society, even if subject to directors' discretion, are supported by the original subscription as consideration and are not analogous to dividends for the purposes of s.238 IA 1986. The transaction as a whole did not constitute a transaction at an undervalue because SSL received consideration at least equal to the value given. Even if there was an undervalue, the statutory defence under s.238(5) was not made out due to lack of reasonable grounds for believing the transaction would benefit SSL. The preference claim also fails as the respondents rebutted the presumption of desire to prefer.

Parties
Applicant: Malcolm Cohen; Applicant: Shane Crooks; Respondent: Co-operative Group Limited; Respondent: Co-operative Group Food Limited; Respondent: Co-operative Foodstores Limited; Respondent: Rochpion Properties (4) LLP
Jurisdiction
England and Wales
Judgment Date
21 May 2026
Procedural Posture
Insolvency Application (transaction at Undervalue/preference) / Final Judgment After Full Trial
Outcome
Application dismissed. No relief granted under s.238 or s.239 IA 1986.
Legal Topics
Transaction at Undervalue, Preference, Directors' Duties, Registered Societies, Liquidation, Creditor Claims
Insolvency Company Law Transaction at Undervalue Preference Directors' Duties Registered Societies Liquidation Creditor Claims

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Parties

Malcolm Cohen

Applicant

Shane Crooks

Applicant

Co-operative Group Limited

Respondent

Co-operative Group Food Limited

Respondent

Co-operative Foodstores Limited

Respondent

Rochpion Properties (4) LLP

Respondent

Procedural Posture

Insolvency Application (transaction at Undervalue/preference) / Final Judgment After Full Trial

Legal Issues

  1. 1 Whether withdrawals of share capital by a registered society constitute a transaction at an undervalue under s.238 Insolvency Act 1986
  2. 2 Whether the transaction(s) amounted to a preference under s.239 Insolvency Act 1986
  3. 3 Whether the statutory defence under s.238(5) IA 1986 applies

Ratio Decidendi

Withdrawals of share capital by a registered society, even if subject to directors' discretion, are supported by the original subscription as consideration and are not analogous to dividends for the purposes of s.238 IA 1986. The transaction as a whole did not constitute a transaction at an undervalue because SSL received consideration at least equal to the value given. Even if there was an undervalue, the statutory defence under s.238(5) was not made out due to lack of reasonable grounds for believing the transaction would benefit SSL. The preference claim also fails as the respondents rebutted the presumption of desire to prefer.

Court Disposition

Application dismissed. No relief granted under s.238 or s.239 IA 1986.