Annulment of a bankruptcy order (Magan v Wilton Management Ltd)

Article summary

Restructuring & Insolvency analysis: An application to annul a bankruptcy order under section 282(1)(a) of the Insolvency Act 1986 was dismissed. The grounds relied on by the applicant bankrupt were that the respondent petitioning creditor had allegedly: fraudulently prevented funds from being released to reduce the petition debt (ground 1), and secondly, known that the applicant had no assets at the time the bankruptcy order was made, such that the bankruptcy order itself would be futile and pointless (ground 2). The court found that ground 1 was not sufficient for the court to conclude that a bankruptcy order ought not to have been made, either on jurisdictional grounds or as a matter of its discretion. This was partly as the applicant had admitted that a significant debt was owed to the petitioning creditor notwithstanding his allegations, and partly as that point had been previously raised and then abandoned in the petition proceedings. The court further concluded that the applicant had...