Stephen Louis Nardelli & Ors v Daniel Richardson & Anor
[2024] EWHC 2740 (Ch)
Alldey Michael Loveridge v Craig Povey & Ors
16 February 2024
[2024] EWHC 329 (Ch)
High Court
A family fought over a caravan park business. One family member tried to stop a rescue plan, wanting to buy it instead. The judge said he couldn't stop the rescue because he didn't have the right to and the rescue plan made sense.
Key Facts
- •Bitter dispute within the Loveridge family over their business, involving five companies and three partnerships.
- •Breton Park Residential Homes Limited (Breton) is in administration.
- •Administrators proposed a rescue plan involving refinancing Breton using funds from another family company, Kingsford.
- •Michael Loveridge (son of Ivy and Alldey), opposed the rescue plan and offered to purchase Breton's assets.
- •Ivy Loveridge (Michael's mother) proposed refinancing Breton through MIAD Group Limited, a special purpose vehicle.
- •Multiple applications were made, including one to direct the administrators to abandon the rescue plan and another for an injunction to prevent the use of Kingsford's funds for refinancing.
Legal Principles
Administrators must prioritize rescuing the company as a going concern unless it's not reasonably practicable or a better result for creditors is achievable.
Paragraph 3, Schedule B1, Insolvency Act 1986
In a balance-sheet solvent administration, administrators must consider members' interests if there's more than one viable way to achieve the primary statutory objective.
Re Hat & Mitre PLC (in Administration) [2020] EWHC 2649 (Ch)
Court review of administrators' decisions is limited to bad faith or perversity; Wednesbury unreasonableness is the standard.
Davey v Money [2018] EWHC 766 (Ch)
A creditor or member can apply to the court if an administrator's actions unfairly harm their interests.
Paragraph 74, Schedule B1, Insolvency Act 1986
Unfair harm isn't limited to differential treatment; a lack of commercial justification for a decision causing harm can also be unfair.
Hockin and others v Marsden and another [2014] EWHC 763 (Ch)
Test for interim injunctions: serious issue to be tried, inadequacy of damages, balance of convenience.
American Cyanamid Co v Ethicon Ltd [1975] AC 396
Court has wide discretion to grant relief under unfair prejudice petitions, including ordering share buyouts.
Section 996, Companies Act 2006
Outcomes
Melinda Doherty joined as respondent to both applications.
Her interest in the Breton Share Transfers, subject to a Section 37 application in family court proceedings, makes her a relevant party.
Administration extended to 31 May 2024.
All parties agreed.
Insolvency Application dismissed.
Michael lacked standing due to a debarring order in family court proceedings preventing him from claiming a beneficial interest in Breton shares; the administrators' decision to pursue a company rescue was not unreasonable.
Injunction Application dismissed.
A monetary award (adjusted buyout figure for Michael's shares in Kingsford) would adequately compensate Michael; the balance of convenience favored allowing the refinancing to proceed to avoid irreparable harm to Melinda.