Bringing several sequential bankruptcy petitions against debtor (Islandsbanki HF and others v Stanford)

Bringing several sequential bankruptcy petitions against debtor (Islandsbanki HF and others v Stanford)  

Simon Duncan, senior associate at Moon Beever, explores the details and examines the implications of Islandsbanki HF and Others v Stanford, a High Court case that concerned several creditors seeking competing bankruptcy petitions against the defendant after his business folded.

Islandsbanki HF and others v Stanford [2019] EWHC 595 (Ch)

What was the background?

Mr Stanford’s business empire had collapsed. Mr Stanford was being pursued by Kaupthing EHF for a purported debt of £460m. The claim was being contested and success on Mr Stanford’s part would, it was alleged, release shares worth £50m to him.

Three different creditors brought sequential bankruptcy petitions against Mr Stanford:

  • the first in time was brought by Islandsbanki HF in reliance on a purported execution of an Icelandic court judgment 
  • the second was brought by HMRC in reliance on a statutory demand 
  • the third was brought by a third creditor, Shineclear Holdings Limited

All three petitions were opposed by Mr Stanford on various technical grounds. The issue for the court was how to determine the competing petitions.

What did the court decide? 

After a long procedural history, the first petition was argued on 20 December 2018 before Chief Insolvency and Companies Court (ICC) Judge Jones. There was a possibility that the grounds of opposition might succeed. The part-heard petition was adjourned and the second and third petitions were listed to be heard at the same time on 22 February 2019. It was anticipated that some further research would be undertaken by counsel and that a further enquiry be made about the Icelandic court judgment relied upon by the first petitioner.

Prior to the hearing on 20 December 2018, there had already been two orders made by other judges that the petitions should not be heard, or case managed together. The first order was made by Chief ICC Judge Briggs on 1 August 2018. That de

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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.