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Peak Hotels & Resorts Ltd (in Liquidation) sub nom (1) Russell Crumpler (2) Sarah Bower (Joint Liquidators of Peak Hotels & Resorts Ltd (In Liquidation)) v Candey Ltd (2017)
The case concerned an application made by the Liquidators of a BVI incorporated company, Peak Hotels and Resorts Limited ("Peak"). The application was intended to determine the effectiveness of a charge granted by Peak to Candey Limited, Peak's former solicitor.
Peak was the holding company of a joint venture vehicle that became the subject of lengthy international litigation proceedings following the breakdown of relations between the joint venture partners and shareholders. Candey acted for peak in the litigation.
In October 2015, Peak ran into financial difficulty and fell into arrears with Candey. To assist with Peak's cashflow, Peak and Candey entered into a fixed fee agreement that covered payment of the arrears as well as all of its future legal fees. Under the Fixed Fee Agreement, Candey was entitled to £3.8 million for its future services. The fee was purportedly secured by way of a charge registered in the BVI pursuant to a charging deed annexed to the Fixed Fee Agreement (the "Charging Deed").
Peak went into liquidation in the BVI on 8 February 2016. The proceedings were subsequently recognised under the Cross-Border Insolvency Regulations (the "CBIR"), meaning s245 IA 1986 (the "IA 1986") was potentially applicable.
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Avanti Communications Group PLC - US Bankruptcy Court Enforces Nonconsensual Third-Party Releases in Chapter 15 Proceeding
Avanti Communications Group PLC ("Avanti") are a satellite operator headquartered in London, with subsidiaries across Europe and Africa, providing fixed satellite services in Europe, the Middle East and Africa.
Avanti had issued Senior Secured Notes maturing in 2021 and 2023 and had borrowed under a senior term loan. Due to delays associated with two of Avanti's satellites, Avanti experienced financial difficulties, with a materially over-leveraged capital structure.
As a result, Avanti entered into discussions with a group of its creditors in an effort to restructure its indebtedness by proposing a Scheme of Arrangement in the UK.
Under the scheme there was to be an exchange of Avanti’s notes due in 2023 for 92.5% of Avanti’s then-issued share capital, which would be allocated on a pro rata basis to the holders of the 2023 notes. In addition, the scheme proposed that the holders of the 2023 notes would grant releases, including the release of claims against Avanti and the guarantors of Avanti’s notes.
The scheme was approved by 98.3% of the scheme creditors.
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Cambridge Analytica closing its doors
Cambridge Analytica, the data analytics firm at the centre of the Facebook data scandal, is closing its doors and commencing insolvency proceedings. The company has been unable to recover from the bad press coverage and large legal fees in dealing with the aftermath of the Facebook data breach allegations.
Although the company denies any wrongdoing, the company is no longer able to continue trading, as customers and suppliers have been put off by the negative media, and it is understood that Chapter 7 Proceedings have been filed in the USA and that the company has been put into administration in the UK. Vince Green and Mark Newman of Crowe Clark Whitehill have been appointed as joint administrators in the UK.
The international data firm has struggled in the aftermath of the Facebook data scandal and the negative press seems to have driven all business away. The firm had no choice but to enter insolvency proceedings, but allegations are swirling that an alternative business is being set up and that the firm's operations will simply move across, so watch this space.
House of Fraser to close 31 stores
British department store House of Fraser have announced plans to close 31 stores across the UK, placing thousands of jobs at risk. Proposals have been filed for Company Voluntary Arrangements ("CVA") of House of Fraser (Stores) Ltd and House of Fraser Ltd which it claimed are central to the significant restructuring of the business.
In May, it was announced that the parent group of House of Fraser would sell a 51% stake to the Chinese owner of Hamleys, C.Banner International, who would inject £70 million into the business.
House of Fraser has 59 department stores with large associated costs. This equates to 4.4 million square feet of retail space with long-term leases, the average remaining lease being 29 years. Following a review of the stores' property portfolio, this will be reduced to 28 stores.
Pending approval of the CVAs, it is anticipated that those stores scheduled for closure will remain open until early in 2019. This development follows losses last year of £44 million.
Sports Direct, who own 11.1% of the shares, have opposed the CVA and have issued proceedings against House of Fraser, claiming that they have been repeatedly denied information which they are legally entitled to, and demands to be provided with a copy of House of Fraser's corporate plan.
Liam Rowley, Head of Strategic Investments at Sports Direct, said: “We have been frozen out by House of Fraser. Their dealings in China are opaque, and it is blatant that we have been unfairly prejudiced. We have no option other than litigation to protect the interests of Sports Direct and its shareholders.”
Creditors will vote on the CVA on 22 June.
K: New Insolvency Practice Direction 2018 now in force
The new Insolvency Practice Direction came into force on 25 April 2018. Some of the key changes to the Practice Direction include:
- The PD has been updated to refer to the relevant 2016 Rules.
- It refers to Registrars as ICC Judges (Insolvency & Companies Court Judges) which came into force on 26 February 2018.
- It directs users to use the Court prepared forms for insolvency matters.
- It deals with practical aspects of the electronic filing system.
- Winding up petitions and bankruptcy petitions can be presented electronically however they will not be treated as presented until the court fee and deposit is paid.
- There is a new provision in relation to r7.23IR 2016 which requires the dismissal of the winding up petition to be gazetted which outlines the circumstances in which the Court will usually dispense with this requirement.
- There is a new section on service of petitions otherwise than by personal service and what steps are required which will ordinarily then justify an order for substituted service. The procedure is now:
- One personal call per residence and place of business of the debtor
- A letter referring to the call, purpose and date for further call
- Attempt to arrange appointment for personal service through the debtor's solicitor
- Applications to set aside statutory demands made more than 18 days after service must include an application for an extension of time with evidence.
- There also is a new section highlighting the "undesirability" of asking for a winding up order in unfair prejudice petitions as a matter of course.