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In the matter of Aartee Steel Group Limited

27 March 2023
[2023] EWHC 1701 (Ch)
High Court
A company in trouble (Aartee Bright Bar) wanted its parent company (Aartee Steel Group) also declared bankrupt. Even though Aartee Steel Group argued they didn't owe the money and weren't bankrupt, the judge looked at their accounts and decided they were bankrupt, so ordered them to be wound up (like bankruptcy).

Key Facts

  • Aartee Bright Bar Limited (in administration) applied for an administration order against Aartee Steel Group Limited (Respondent Company).
  • The Respondent Company is the sole shareholder of the Applicant and Aartee Bright Bar Property Limited.
  • The Applicant claimed the Respondent Company owed it £8,759,632.42 from historic transactions (2011-2014).
  • The Respondent Company disputed the debt and its insolvency.
  • The Respondent Company's recent application to remove the Applicant's administrators was dismissed ([2023] EWHC 606 (Ch)).
  • The Respondent Company is a non-trading investment holding company.
  • The Applicant's administrators' witness statements supported the debt claim and insolvency.
  • The Respondent Company's witness statements disputed the debt's validity and recoverability due to its age and lack of first-hand knowledge by current directors.

Legal Principles

Standing to apply for an administration order

Insolvency Act 1986, Schedule B1, paragraph 12(1)(c)

Test for insolvency in administration applications

Insolvency Act 1986, Schedule B1, paragraph 11; Insolvency Act 1986, sections 122(1)(f), 123

Statutory objectives of administration

Insolvency Act 1986, Schedule B1, paragraph 3(1)

Treatment of administration application as winding-up petition

Insolvency Act 1986, Schedule B1, paragraph 13(1)(e)

Limitation Act 1980, sections 29-30 (Acknowledgement of debt)

Limitation Act 1980

Outcomes

Winding-up order made for the Respondent Company.

The court found the Respondent Company insolvent on both cash flow and balance sheet bases, and that administration was not reasonably likely to achieve a better result for creditors.

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