Extent of claims provable in a company voluntary arrangement (Re North Point Global Ltd)

Table of contents

• What are the practical implications of this case?
• What was the background?
• What did the court decide?
• Case details

Article summary

Restructuring & Insolvency analysis: Liquidators of a subsidiary company had submitted a proof in the company voluntary arrangement (CVA) of the parent company. The proof was based upon a claim under section 239 of the Insolvency Act 1986 (IA 1986) on the basis that certain payments by the parent to the subsidiary had amounted to unlawful preferences of the company. In the present proceedings, the liquidators appealed against the decision by the supervisor of the CVA to reject that proof. The Chancery Division made a declaration that the liquidators were contingent creditors for the purposes of rules 14.1 and 14.2.1 of the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, with a right to prove in the CVA. Written by Joseph Curl, barrister, at 9 Stone Buildings, who acted for the liquidators in this case