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Company Law

Analysis - guidance - compliance

17 APR 2014

APPLEYARD v REFLEX RECORDINGS LIMITED

APPLEYARD v REFLEX RECORDINGS LIMITED
Chancery Division
Birmingham District
David Cooke J
18 December 2013

COOKE J:
[1] A question arises in respect of the company’s legal costs incurred in responding to the two applications that I heard, on an ex parte basis, on 9th December and which have come back before me today. On 9th December, I made a freezing injunction in respect of the company’s assets designed to preserve the position pending consideration of the application for an administration order, which I have indicated I will grant today. The terms of the freezing order, as is conventional, contained an exception for a reasonable amount to be spent by the person injuncted, in this case the company, on legal representation. As is not uncommon, it has turned out to be the case that, although the applicant was prepared to agree that a reasonable sum for such legal fees was £5,000, the bank, in whose name the only asset of the company is held, refused to release any part of it. That, as I say, is not an uncommon occurrence. It results quite often in further costs being incurred in reference back to the court for an explicit order authorising or even requiring release of funds by a bank, which is concerned not to be caught in the position that there is otherwise an allegation that what it has paid out is not a reasonable amount.


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