- Challenges to individual voluntary arrangements and material irregularities (Huntley v Collier)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Restructuring & Insolvency analysis: This successful challenge to the debtor’s individual voluntary arrangement (IVA) provides useful guidance to those involved in the preparation of IVA proposals and the conduct of creditors’ meetings. The court held that the failure to provide full disclosure of the terms on which third party funding was to be provided was a material irregularity, notwithstanding the fact that the majority creditor with over 75% of the voting rights had been prepared to support the IVA without such full disclosure. The approval was also to be revoked due to the fact that factual corrections had been made to the debtor’s proposal via modifications proposed by the majority creditor on the morning of the creditors’ meeting. The decision is also an important example of the circumstances in which a chairman/supervisor will be held liable for the costs of an application made under section 262 of the Insolvency Act 1986. Written by Thomas Cockburn, barrister at 9 Stone Buildings.
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