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In July 2009, a bankruptcy order was made against R on an HMRC petition, despite the petition debt having been substantially reduced by payments and adjustments. R immediately applied for a stay of the bankruptcy, which was granted, pending his appeal. In July 2010, the Court of Appeal refused permission to appeal. The stay continued pending R's application to review or rescind the bankruptcy order under s 375 of the Insolvency Act 1986. On the first hearing, the application was adjourned to enable R to sell his properties, but he had not been able to do so. R hoped to enter into an IVA so that he could manage the sale or development of his properties in order to meet his liabilities. Norris J dismissed the application. The mere reduction in the petition debt after the bankruptcy order was not of itself an exceptional circumstance that could justify rescission. The proposals in relation to the properties were optimistic and without foundation. The creditors should be entitled to pursue the bankruptcy, having been kept out of their money whist it was stayed.
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...