by Joe O'Malley , Michael Kelly November-02-2021 in Litigation & Dispute Resolution, Commercial & Business, Corporate, Dispute Resolution & Litigation, Insolvency & Restructuring
Hayes recently successfully defended a Liquidator in an appeal of a decision of the High Court to refuse an application by a shareholder of a company to remove the Liquidator in a long running complex liquidation of a company with foreign subsidiaries and assets.
Print & Display appealed the decision of the High Court, find a link to our previous article here, to the Court of Appeal. The case was heard on 17 June 2021, the Court delivered an outline decision dismissing the appeal on 24 June 2021 and a written decision (Haughton J) issued in October 2021.
Taking the five issues identified in our previous article in turn, the Court of Appeal found:
- The manner in which the liquidator conducted the sale of the Polish subsidiary was eminently fair and sensible.
- The appellant could not contest that it ever challenged the strategy of awaiting the resolution of the restitution claims before selling the Polish Property.
- There was no evidence to suggest that the tenant who caused the rubble to accumulate at the Polish Property was unsuitable or would prove to be an unsatisfactory tenant.
- The Liquidator had no obligation to consult with the appellant over his decision not to appeal the finding of the polish court.
- The suggestion of “open hostility” exaggerates the discord between the liquidator and Appellant.
In addition to these issues the Appellant suggested that the liquidator has misled the High Court and that his proposal to appoint Michael Curneen as liquidator of the polish subsidiary was prejudicial and inappropriate. The Court found that the liquidator was acting on the basis of professional advice and found even taking the new evidence adduced by the Appellant, no good cause had been shown for removal of the respondent as liquidator.
Conclusion
The Court of Appeal judgment is noteworthy as it confirms that the Ballyrider principles apply to a member’s voluntary liquidation and it restates those principles in the context of a long running and complex liquidation.
The judgment highlights that the Court’s wide discretion under the ‘good cause’ criterion will not be met where the Court is satisfied that the liquidator will conclude the liquidation in a prompt and orderly fashion. In this way, the Court not only has regard to the conduct of the liquidator up to the time of the application but it also looks at the steps required to conclude the liquidation and the progress made by the liquidator in this regard, even after the High Court decision.
Hayes advises liquidators and other insolvency practitioners as well as shareholders and creditors in all aspects of liquidations, receiverships and examinerships. If you have any queries in relation to this judgment or any other insolvency matter, please contact Joe O’Malley jomalley@hayes-solicitors.ie or Michael Kelly mjkelly@hayes-solicitors.ie.
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About the Authors
Joe O'Malley
Joe is Managing Partner and Head of the Commercial Litigation & Dispute Resolution team at Hayes solicitors. He handles a wide variety of commercial disputes involving high value claims, complex issues and voluminous data for financial institutions and corporate clients.
Michael Kelly
Michael is an senior associate solicitor in the Commercial Litigation & Dispute Resolution team at Hayes. He has experience advising commercial clients with respect to a wide variety of issues, in particular restructuring and insolvency cases. He regularly acts for receivers, liquidators and examiners in High Court and Commercial Court proceedings.