Shaw v Webb & Ors
2014
CHANCERY DIVISION
United Kingdom
CORAM
- HIS HONOUR JUDGE SIMON BARKER QC
- sitting as a Judge of the High Court
Areas of Law
- Insolvency and Bankruptcy Law
- Commercial Law
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
Mr. Gareth David Shaw, director of BBF, sought to appoint joint administrators for the financially troubled BBF amid an outstanding winding-up petition from the company's landlords. The court found significant unexplainable financial transactions and a lack of reliable evidence from the director, ultimately rejecting the administration order. Instead, a provisional liquidator was appointed to manage and sell BBF's assets while investigating the financial dealings post-winding-up petition.
JUDGMENT
HHJ SIMON BARKER QC :
By a Form 2.1B application issued on 4 April 2014 pursuant to paragraph 12(1)(b) of Schedule B1 to the Insolvency Act 1986 (respectively : Sch B1 and IA1986), Mr Gareth David Shaw, as the sole director of Brown Bear Foods Limited (BBF), seeks an order for the appointment of two directors of Baker Tilly Restructuring and Recovery LLP (BTRR), Mr Damian Webb and Mr Dilip Dattani, as joint administrators of BBF.
An out of court appointment was not open to Mr Shaw. There is an outstanding winding up petition (the Petition), which was presented to the court on 21 February 2014 by Mr Radcliffe and Ms Wilson, who trade as T&E Properties (T&E) and are BBF’s landlord, in respect of unpaid rent in the order of £35,000. There is also a qualifying floating charge holder, Close Brothers Limited (CBL). It appears that there is no outstanding secured debt to CBL, however CBL, or a group company, is owed substantial sums pursuant to one or more hire purchase agreements.
Service of the application was effected one day before the hearing but no difficulty arises from this because all relevant parties have consented to short notice of the application. By the time of the hearing, neither T&E nor CBL opposed the making of an administration order. That being said, I bear in mind that T&E originally opposed the application and neither T&E nor CBL have had much time to consider the evidence put forward.
BBF’s history is very short, but significant. BBF was incorporated in May 2013 as HFTS 5 Ltd and changed its name by special resolution on 1 July 2013.
According to Mr Shaw, from incorporation until 10 March 2014, that is until 4½ weeks ago, BBF’s sole shareholder and sole director was a Mr David Spicer Hepworth. Mr Hepworth had been a director of Q Cold Ltd which had been incorporated in 2005 and went into administration on 20 June 2013. BBF purchased Q Cold’s food packaging trade and assets from its administrators.
Mr Shaw had been employed as operations manager at Q Cold for some 10 years and transferred to BBF in that role.
The evidence available to the court as to BBF’s trade and state of affairs is very limited. From the available management accounts, which are rudimentary and concern only trading in the months of December 2013 and January 2014 together with a cumulative year to date trading and profit and loss account and an outline balance sheet as at 31 December 2013 and 31 January 2014, it appears that by then BBF was trading at a lo