Permission to appeal - Barons Finance litigation continues

Permission to appeal - Barons Finance litigation continues

Permission to appeal has been granted in Re Barons Finance Ltd (in liquidation). David Bowden of David Bowden Law examines the latest development in the Barons Finance litigation and considers the court's decision to grant permission to appeal where relief from sanctions was refused.

Original news

Re Barons Finance Ltd (in liquidation) [2015] EWHC 2007 (Ch), [2015] All ER (D) 126 (Jul)

A company had assigned its book debts and gone into liquidation. The liquidator applied to have the assignment set aside. The Chancery Division allowed the application as, on the evidence, the assignment had been fraudulently backdated and was automatically avoided under the Insolvency Act 1986, s 127 (IA 1986).

What were the facts in this case?

A petition to wind up Barons Finance Limited (BFL) was issued on 9 May 2012 and a winding-up order was made on 19 September 2012. Mr Gopee claimed that the debts owing to BFL had been assigned by him to himself and Barons Bridging Finance 1 Limited (the assignees). Mr Gopee alleged this was done by a written assignment which he says is dated 31 March 2012.

The assignment provided as follows:

'The Assignor hereby assigns and transfers absolutely to the Assignee, with full title guarantee, all the debts currently held in the Assignor's books and records which the Assignor shall hand over to the Assignee on a date to be fixed when for the purpose of executing a transfer of all the legal charges currently held in the name of [the Company]...shall be executed (sic) and which in any event shall not exceed a period of 6 months from today's date.'

The consideration for this assignment was claimed to be the payment by the assignees of moneys owed to Kensington Mortgage Company. The assignment was executed by Mr Gopee alone on behalf of all the various companies.

The liquidator of BFL (Mr Alan Coleman) applied to the court to set aside the purported assignment of all of BFL's book debts. At trial the liquidator made

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About the author:
Eleanor qualified in 1998 into the insolvency team at ASB law. She became a partner in 2005, and went on to head up the Recovery & Insolvency team. Whilst traditionally specialising mainly in contentious corporate insolvency matters, in recent years she has moved into the non contentious arena, in particular specialising in company administrations.