All your resources at your fingertips.Learn More
An investment scheme related to assets in Italy with the fund based around an English limited partnership (the Blue Skye Fund) holding such assets. Some of the defendants were involved in managing the investment structure, whereas others were members of the limited partnership. The claimants alleged that some of the defendants entered into a complex multi-stage reorganisation scheme in relation to the Blue Skye Fund which was designed to diminish the interests of the claimants. The claimants advanced a number of claims against the defendants alleging inter alia breach of the assignment agreement, unlawful tortious conspiracy, procuring breach of contract, and breach of s 423 of the Act. After an amount of procedural wrangling, the defendants applied to strike out the proceedings, and raised objections to the claims under s 423. Flaux J ruled that the objections raised by the defendants were based upon a misinterpretation of s 423, which covered actions that would prejudice a claim that may be made by indirect means against the debtor - ie the Blue Skye Fund. The concept of ‘victim' in s 423 was widely defined and was not restricted to creditors strictly speaking, but could encompass persons who might at some stage in the future have a claim against the debtor. Section 423 could also be invoked by a person who was not in contemplation when the disputed transaction was entered into. Section 423 was capable of having extraterritorial effect and therefore the defendants' objection based upon jurisdiction could not be upheld. The s 423 claim was fully arguable and should therefore be allowed to proceed to trial.
To view the full text, please log in.
To receive a FREE 14 day online trial to Insolvency Law Online click here.
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...