Tradition (UK) Ltd v Ahmed & Ors

Tradition (UK) Ltd v Ahmed & Ors

The court found that the claims of the Third to Eighth Respondents were either not established or only partially established on the evidence, and that if the correct amounts had been admitted, the IVA would not have been approved by the required majority. This amounted to a material irregularity at the creditors'...

Source-derived case information.

Parties
Applicant: Tradition (UK) Limited; First Respondent: Eaitisham Ahmed; Second Respondent: Andrew Andronikou; Third Respondent: Kashif Ahmed; Fourth Respondent: Saeeda Ahmed; Fifth Respondent: Samina Ahmed; Sixth Respondent: Tahir Bhatti; Seventh Respondent: Hornby Street Limited; Eighth Respondent: Discount Designer Wear Limited
Jurisdiction
England and Wales
Judgment Date
05 December 2008
Procedural Posture
Bankruptcy/iva Challenge / Judgment After Trial of Application to Set Aside Creditors' Meeting Decision
Outcome
Application allowed; approval of the IVA revoked; no further creditors' meeting to be summoned.
Legal Topics
Individual Voluntary Arrangement (iva), Material Irregularity, Creditors' Meeting, Admission of Claims, Professional Conduct of Insolvency Practitioner
Insolvency Bankruptcy Individual Voluntary Arrangement (iva) Material Irregularity Creditors' Meeting Admission of Claims Professional Conduct of Insolvency Practitioner

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Summary, issues, holding and outcome

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Parties

Tradition (UK) Limited

Applicant

Eaitisham Ahmed

First Respondent

Andrew Andronikou

Second Respondent

Kashif Ahmed

Third Respondent

Saeeda Ahmed

Fourth Respondent

Samina Ahmed

Fifth Respondent

Tahir Bhatti

Sixth Respondent

Hornby Street Limited

Seventh Respondent

Discount Designer Wear Limited

Eighth Respondent

Procedural Posture

Bankruptcy/iva Challenge / Judgment After Trial of Application to Set Aside Creditors' Meeting Decision

Legal Issues

  1. 1 Whether the claims of the Third to Eighth Respondents were valid and properly admitted for voting at the creditors' meeting approving the IVA
  2. 2 Whether there was a material irregularity at or in relation to the creditors' meeting under section 262(1)(b) of the Insolvency Act 1986
  3. 3 Whether the conduct of the nominee/chairman (Mr Andronikou) met the standard of a reasonably competent insolvency practitioner

Ratio Decidendi

The court found that the claims of the Third to Eighth Respondents were either not established or only partially established on the evidence, and that if the correct amounts had been admitted, the IVA would not have been approved by the required majority. This amounted to a material irregularity at the creditors' meeting under section 262(1)(b) and rule 5.22(5), justifying revocation of the IVA approval. The nominee, Mr Andronikou, failed to meet the standard of a reasonably competent insolvency practitioner in preparing his report and in his conduct during proceedings, but not in his conduct of the creditors' meeting.

Court Disposition

Application allowed; approval of the IVA revoked; no further creditors' meeting to be summoned.

Orders

  • Approval of the debtor's IVA given at the meeting on 29 March 2007 is revoked pursuant to section 262(4) of the Insolvency Act 1986.
  • No further creditors' meeting is to be summoned.