In yet another case in the fallout following the collapse of Greensill Capital, the High Court declined to grant relief under s423 Insolvency Act 1986 (“IA 1986”) despite finding that there had been a transaction at an undervalue.
Under s423 IA 1986, the court has a broad discretion as to the remedy that results from a transaction at an undervalue. However, it is likely to be an exceptional case where relief will not be ordered where such a transaction is found to have been entered into: BTI 2014 LLC v Sequana SA [2017] EWHC 211 (Ch).
Lord Justice Miles was of the opinion that the case before him fell into that exceptional category given that, unusually, this was a case where the value of an asset transferred as part of a transaction at an undervalue fell to nothing through no fault or action of the transferee.
Given the restorative nature of the court’s jurisdiction under s423 IA 1986, the court came to the conclusion that an order against the defendants would not be appropriate. As a result, Credit Suisse v SoftBank becomes another case in a long line of cases highlighting the difficulty of bringing a successful claim under s423 IA 1986.
Read the full judgment here.
