Court allows appeal against Trustee’s rejection of proof of debt (Claims Direct plc v Hinton)

Article summary

Restructuring & Insolvency analysis: The High Court allowed an appeal brought under Rule 14.8(1) of the Insolvency (England and Wales) Rules 2016 (the judgment refers to the Insolvency Rules 1986) by Claims Direct plc (in liquidation) (Claims Direct) against the rejection by a trustee in bankruptcy (Trustee) of a proof of debt submitted by Claims Direct in the bankruptcy of one of its former directors (Bankrupt). The court considered claims for fraudulent breach of duty (Breach Claim) and the tort of deceit (Deceit Claim) made against the Bankrupt and how the loss arising from those claims should be valued. The Deceit Claim succeeded but the Breach Claim did not. However this did not affect the value of the proof of debt which was admitted in its entirety at £9.75m. To the extent that Claims Direct received any benefit from the transaction in question, the value of that benefit should be deducted from the damages and...