Gertner v CFL Finance Ltd & Anor

Gertner v CFL Finance Ltd & Anor

The Court held that Kaupthing remained a creditor entitled to vote at the creditors' meeting because the KSA did not extinguish or render unascertained the debt, but that the KSA breached the good faith principle by providing Kaupthing with a collateral advantage not available to other creditors, amounting to a material irregularity under s.262(1)(b) IA 1986. The appeal was dismissed and the judge's order revoking the approval of the IVA was upheld.

Parties
Appellant: Moises Gertner; First Respondent: CFL Finance Limited; Second Respondent: David Rubin
Jurisdiction
England and Wales
Judgment Date
30 July 2018
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
appeal dismissed
Legal Topics
Individual Voluntary Arrangements (iva), Creditors' Meetings, Material Irregularity, Good Faith Principle, Unfair Prejudice, Voting Rights of Creditors
Insolvency Law Bankruptcy Law Civil Procedure Individual Voluntary Arrangements (iva) Creditors' Meetings Material Irregularity Good Faith Principle Unfair Prejudice +1 more

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Parties

Moises Gertner

Appellant

CFL Finance Limited

First Respondent

David Rubin

Second Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether Kaupthing was a creditor entitled to vote at the IVA creditors' meeting given the terms of the settlement agreement (KSA)
  2. 2 Whether the KSA breached the principle of good faith between creditors, amounting to a material irregularity under s.262(1)(b) Insolvency Act 1986
  3. 3 Whether the IVA was unfairly prejudicial to CFL as a creditor under s.262(1)(a) Insolvency Act 1986

Ratio Decidendi

The Court held that Kaupthing remained a creditor entitled to vote at the creditors' meeting because the KSA did not extinguish or render unascertained the debt, but that the KSA breached the good faith principle by providing Kaupthing with a collateral advantage not available to other creditors, amounting to a material irregularity under s.262(1)(b) IA 1986. The appeal was dismissed and the judge's order revoking the approval of the IVA was upheld.

Court Disposition

appeal dismissed

Orders

  • Approval of the IVA revoked due to material irregularity
  • Kaupthing's vote excluded from the creditors' meeting