BTI 2014 LLC v Sequana S.A. & Ors

BTI 2014 LLC v Sequana S.A. & Ors

The court held that the dividends did not contravene Part 23 of the Companies Act 2006 as the accounts were properly prepared, the directors acted honestly and prudently, and the company was not on the verge of insolvency. There was no breach of fiduciary duty. However, the May Dividend was a transaction at an undervalue under section 423 of the Insolvency Act 1986, as it was paid with the purpose of putting assets beyond the reach of BAT as a creditor.

Parties
Claimant: BTI 2014 LLC; Claimant: B.A.T. Industries PLC; Defendant: Sequana S.A.; Defendant: Antoine Courteault; Defendant: Pierre Martinet; Defendant: Clive Mountford; Defendant: Martin Newell; Defendant: Windward Prospects Limited
Jurisdiction
England and Wales
Judgment Date
11 July 2016
Procedural Posture
Civil (commercial/company) / Judgment After Full Trial
Outcome
Claims under Companies Act 2006 and for breach of fiduciary duty dismissed; claim under section 423 of the Insolvency Act 1986 partially allowed as to the May Dividend.
Legal Topics
Unlawful Dividends, Reduction of Capital, Directors' Duties, Transactions at Undervalue, Creditors' Interests, Environmental Liability, Provisioning in Accounts
Company Law Insolvency Law Fiduciary Duties Unlawful Dividends Reduction of Capital Directors' Duties Transactions at Undervalue Creditors' Interests +2 more

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Parties

BTI 2014 LLC

Claimant

B.A.T. Industries PLC

Claimant

Sequana S.A.

Defendant

Antoine Courteault

Defendant

Pierre Martinet

Defendant

Clive Mountford

Defendant

Martin Newell

Defendant

Windward Prospects Limited

Defendant

Procedural Posture

Civil (commercial/company) / Judgment After Full Trial

Legal Issues

  1. 1 Whether dividends paid by AWA to Sequana contravened Part 23 of the Companies Act 2006
  2. 2 Whether directors breached fiduciary duties by paying dividends in light of contingent liabilities
  3. 3 Whether the dividends constituted transactions at an undervalue under section 423 of the Insolvency Act 1986

Ratio Decidendi

The court held that the dividends did not contravene Part 23 of the Companies Act 2006 as the accounts were properly prepared, the directors acted honestly and prudently, and the company was not on the verge of insolvency. There was no breach of fiduciary duty. However, the May Dividend was a transaction at an undervalue under section 423 of the Insolvency Act 1986, as it was paid with the purpose of putting assets beyond the reach of BAT as a creditor.

Court Disposition

Claims under Companies Act 2006 and for breach of fiduciary duty dismissed; claim under section 423 of the Insolvency Act 1986 partially allowed as to the May Dividend.

Orders

  • BTI's claims under Companies Act 2006 and for breach of fiduciary duty dismissed.
  • BAT's claim under section 423 of the Insolvency Act 1986 succeeds in respect of the May Dividend; remedy to be determined.