Representation of Collections Group [2013] JRC 096 (20 May 2013)

Representation of Collections Group [2013] JRC 096 (20 May 2013)

It is just and equitable to wind up the companies under Article 155 and authorise the liquidators to enter into a pre-packaged sale to Newco because the companies are hopelessly insolvent, no alternative funding is available, immediate closure would result in no return to creditors and loss of jobs, and the pre-pack offers the only realistic prospect of preserving value for creditors and employees, provided that the liquidators exercise independent judgment and comply with best practice guidance.

Citation
[2013] JRC 096
Parties
Company: Collections Holdings Limited; Company: Collections Group Limited; Company: Pierretoni 1999 Limited; Company: Axle Clothing Company Limited; Company: Dive and Ski Sports Limited; Shareholder: Mr Kevin Leech; Proposed Liquidator: Mr Alan Roberts; Director/applicant: representor (unnamed director)
Jurisdiction
Jersey
Judgment Date
20 May 2013
Procedural Posture
Winding Up Petition / Judgment on Application for Winding Up and Authorisation of Pre Pack Sale
Outcome
Companies ordered to be wound up under Article 155 on just and equitable grounds; liquidators authorised to enter into pre-packaged sale with Newco.
Legal Topics
Winding Up on Just and Equitable Grounds, Pre Packaged Sale, Liquidator Powers, Creditor Interests
Insolvency Company Law Winding Up on Just and Equitable Grounds Pre Packaged Sale Liquidator Powers Creditor Interests

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Parties

Collections Holdings Limited

Company

Collections Group Limited

Company

Pierretoni 1999 Limited

Company

Axle Clothing Company Limited

Company

Dive and Ski Sports Limited

Company

Mr Kevin Leech

Shareholder

Mr Alan Roberts

Proposed Liquidator

representor (unnamed director)

Director/applicant

Procedural Posture

Winding Up Petition / Judgment on Application for Winding Up and Authorisation of Pre Pack Sale

Legal Issues

  1. 1 Whether it is just and equitable to wind up the companies under Article 155 of the Companies (Jersey) Law 1991
  2. 2 Whether the Court should authorise liquidators to enter into a pre-packaged sale to a new company in which an existing director has an interest

Ratio Decidendi

It is just and equitable to wind up the companies under Article 155 and authorise the liquidators to enter into a pre-packaged sale to Newco because the companies are hopelessly insolvent, no alternative funding is available, immediate closure would result in no return to creditors and loss of jobs, and the pre-pack offers the only realistic prospect of preserving value for creditors and employees, provided that the liquidators exercise independent judgment and comply with best practice guidance.

Court Disposition

Companies ordered to be wound up under Article 155 on just and equitable grounds; liquidators authorised to enter into pre-packaged sale with Newco.

Orders

  • Winding up of Collections Holdings Limited, Collections Group Limited, Pierretoni 1999 Limited, Axle Clothing Company Limited, and Dive and Ski Sports Limited under Article 155.
  • Liquidators authorised (but not directed) to enter into agreement for sale of business and assets to Newco.