Thursday 13 August 2015

UK: England and Wales: the misuse of insolvency legislation and the winding-up of companies in the public interest

Mr Justice Norris gave judgment several days ago in Secretary of State for Business, Innovation and Skills v PAG Management Services Ltd [2015] EWHC 2404 (Ch). The Secretary of State presented a petition for the winding-up on pubic interest grounds, under section 124A of the Insolvency Act 1986, in respect of a company - PAG - that had been incorporated in 2011 to manage and coordinate a business rates mitigation scheme. Mr Justice Norris held that it was in the public interest for the company to be wound-up, not because the promotion of the mitigation schemes was inherently objectionable but because of the way in which the schemes operated (using, for example, artificial leases with no commercial reality and also operating in a way that was held to be a misuse of the insolvency legislation).

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