Koon v Ltd v Bowes & Ors [2019] EWHC 3455 (Ch) (11 December 2019)

Koon v Ltd v Bowes & Ors [2019] EWHC 3455 (Ch) (11 December 2019)

The administrators' appointment was made with improper motive by Mr Parker to secure a collateral advantage and influence the insolvency process at the expense of the majority creditor, Mr Koon. Mr Parker acted as de facto director in breach of fiduciary duties, and the Debenture is susceptible to challenge. The court exercised its discretion under Paragraph 81(1) to provide for the administrators' appointment to cease.

Citation
[2019] EWHC 3455 (Ch)
Parties
Applicant: Tan Koon; First Respondent: Tom Bowes; Second Respondent: Andrew David Rosler; Third Respondent: Christopher Parker
Jurisdiction
England and Wales
Judgment Date
11 December 2019
Procedural Posture
Insolvency Application / Judgment on Application Under Paragraph 81 of Schedule B1 to the Insolvency Act 1986
Outcome
Administrators' appointment to cease to have effect under Paragraph 81(1) of Schedule B1 to the Insolvency Act 1986. Winding up petition to proceed.
Legal Topics
Administration Appointment, Improper Motive, Fiduciary Duties, Floating Charge Validity, Winding Up
Insolvency Company Law Administration Appointment Improper Motive Fiduciary Duties Floating Charge Validity Winding Up

Case Brief

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Parties

Tan Koon

Applicant

Tom Bowes

First Respondent

Andrew David Rosler

Second Respondent

Christopher Parker

Third Respondent

Procedural Posture

Insolvency Application / Judgment on Application Under Paragraph 81 of Schedule B1 to the Insolvency Act 1986

Legal Issues

  1. 1 Whether the appointment of administrators was made with improper motive under Paragraph 81 of Schedule B1 to the Insolvency Act 1986
  2. 2 Whether the Debenture and floating charge are valid and enforceable
  3. 3 Whether breaches of fiduciary duty occurred in the appointment process

Ratio Decidendi

The administrators' appointment was made with improper motive by Mr Parker to secure a collateral advantage and influence the insolvency process at the expense of the majority creditor, Mr Koon. Mr Parker acted as de facto director in breach of fiduciary duties, and the Debenture is susceptible to challenge. The court exercised its discretion under Paragraph 81(1) to provide for the administrators' appointment to cease.

Court Disposition

Administrators' appointment to cease to have effect under Paragraph 81(1) of Schedule B1 to the Insolvency Act 1986. Winding up petition to proceed.

Orders

  • Order providing for the administrators' appointment to cease to have effect.
  • Direction to hear further from counsel on timing of cessation and winding up.