Parrot Pay Limited (in liquidation) v Goddington Pierce Limited (in provisional liquidation)
[2023] EWHC 2774 (Ch)
Liberty Commodities Ltd v Citibank NA London & Ors
28 June 2023
[2023] EWHC 2020 (Ch)
High Court
A bank tried to close down three companies. Two were settled. For the third, there was a fight over who owed how much money. The judge decided to let a different company take over the case and figure it out later.
Key Facts
- •Citibank petitioned to wind up three companies (SSUK, MDR, LCL) in March 2021, acting as Note Trustee for Credit Suisse Funds.
- •The petitions were subject to restrictions imposed by the Corporate Governance and Insolvency Act 2020 (Schedule 10) due to the coronavirus pandemic.
- •A preliminary hearing in May 2022 found it likely that winding-up orders would be made.
- •An agreement was reached between Credit Suisse Funds and LCL, SSUK, and MDR, leading Citibank to seek withdrawal of petitions.
- •Petitions against SSUK and MDR were withdrawn; however, two creditors (White Oak and NPS) supported the petition against LCL.
- •White Oak claims US$190,444,699.30 is owed by LCL, and NPS claims £6,556,167.13 is owed.
- •LCL disputes the debts claimed by both White Oak and NPS on various grounds.
- •A consent order was reached to adjourn the dismissal application, allowing time for evidence filing and potential expert testimony.
Legal Principles
A petitioner must prosecute a petition following presentation; failure to do so may lead to dismissal.
Insolvency Rules (England & Wales) 2016, Rule 7.17(1)(b)-(c)
A creditor has the right to present a petition under section 122(1)(f) of the Insolvency Act 1986 if a debtor is unable to pay its debts.
Insolvency Act 1986, section 122(1)(f)
Post-petition assignment of a debt does not prevent substitution of a petitioner.
Perak Pioneer Limited v Petroliam Nasional BHD [1986] AC 849
The court may substitute a petitioner if the original petitioner is not entitled to present the petition or fails to prosecute it (Rule 7.17(2)). The court may consider standing before or after substitution, but the usual practice is 'Substitution First, Standing Later'.
Insolvency Rules (England & Wales) 2016, Rule 7.17(2)
Outcomes
Petitions against SSUK and MDR were dismissed.
Agreement reached between Credit Suisse Funds and the respective companies.
Application for dismissal of the petition against LCL was adjourned.
Consent order to allow time for evidence and potentially expert evidence regarding the debts claimed by White Oak and NPS.
Substitution of petitioner in favor of NPS was ordered.
LCL failed to raise a cogent dispute regarding NPS's claim, and the court prioritized the policy of prosecuting the petition. White Oak withdrew its application for substitution.
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