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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

01 MAY 2012

Re Gatnom Capital & Finance Ltd; Macaria Investments Ltd v (1) Sanders (2) Gatnom Capital & Finance Ltd (3) Omatov [2011] EWHC 3716 (Ch); [2012] BPIR 299

(Chancery Division, Newey J, 29 November 2011)

On an application by a creditor who had presented a winding-up petition, Roth J had revoked a Company Voluntary Arrangement (CVA) on the basis of material irregularity, as two creditors, amounting to 80% of the debts of the company, were based on sham contracts (see [2010] EWHC 3353 (Ch), [2011] BPIR 1013). The chairman of the creditors' meeting and the company were ordered to pay costs of the proceedings on an indemnity basis. The creditor successfully obtained a winding-up order against the company, and successfully opposed the company's application for the winding-up order to be rescinded. Newey J granted a third party costs order against the sole shareholder and director of the company, as he had improperly sought to thwart the applicant's winding-up petition by promulgating the CVA by reliance upon the sham creditors. He had been the controller and funder of the defence of the proceedings based upon impropriety, when the company was insolvent.

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