Insolvency—appeal in a transaction at an undervalue claim (Re Guardian Care Homes (West) Ltd)

Article summary

Restructuring & Insolvency analysis: The court dismissed an appeal by the liquidators of a company who had made an application under section 238 of the Insolvency Act 1986 (IA 1986) alleging a transaction at undervalue. The liquidators challenged a transaction between the insolvent company and a related company, which they alleged had been effected by book entries made by the company’s financial controller. The respondents denied that the book entries were capable of effecting (as opposed to recording) a transaction, and claimed they had been entered in error. The claim was rejected at trial and the liquidators appealed, challenging findings on their pleadings and the respondents’ defence, and the judge’s assessment of all the evidence. Zacaroli J upheld the first instance decision in a thorough judgment which emphasised the liquidators’ failure to prove their pleaded case and the usual rule of appellate courts deferring to the evidential findings of trial judges. Written by Otis Graham at...