Bankruptcy petitions—are you being served? (Gate Gourmet Luxembourg IV Sarl v Morby)

Bankruptcy petitions—are you being served? (Gate Gourmet Luxembourg IV Sarl v Morby)

How important is it to be properly served with abankruptcy petition? Steven Thompson QC, abarrister at XXIV Old Buildings, who represented the petitioners in Gate Gourmet v Morby, says the court’s decision in that case shows adefect in the service of apetition can be waived, but points out the importance of ensuring it has acourt office stamp date on it.

Original news

Gate Gourmet Luxembourg IV Sarl and another v Morby [2015] EWHC 1203 (Ch), [2015] All ER (D) 117 (May)

The Chancery Division made abankruptcy order in respect of the respondent, having considered issues of jurisdiction, service and security.

What was the background to the hearing briefly?

A few years ago, Mr Morby sold agroup of companies to Gate Gourmet for several million pounds. However, atax dispute arose after the sale and Gate Gourmet brought proceedings against Mr Morby. The proceedings were settled. Under its terms Mr Morby agreed to pay Gate Gourmet two tranches of money—he paid the first tranche but not the second. The debt was secured by asecond charge over aproperty owned by Mr Morby in the south of France. Gate Gourmet issued astatutory demand which Mr Morby sought to set aside on the basis that Gate Gourmet had the charge. There was an issue about the extent of any equity in the house but Mr Morby refused to let avaluer into his house. Mr Morby appeared in person in the county court, but it dismissed the challenge to the demand. The same day, Gate Gourmet presented the bankruptcy petition.

What were the legal issues that the Registrar had to decide in this application?

There were three issues:

  • whether the court had jurisdiction
  • whether Mr Morby was properly served, and
  • whether the existence of the charge precluded abankruptcy order being made

What were the

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About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.