HIGH COURT HANDS DOWN JUDGMENT IN HUNT v SINGH (Appeal from Hunt v Balfour-Lynn and others re Marylebone Warwick Balfour Management Limited in Liquidation)
Griffins were successful in an appeal to the High Court in the case of Marylebone Warwick Balfour Management Limited (in liquidation) v Balfour and others.
In 2002, the company entered into a “conditional share scheme” and operated that scheme until 2010. The scheme was designed to allow staff to receive non-contractual gratuitous bonuses in a way that, if the scheme were effective, would eliminate the company needing to make Pay as You Earn (PAYE) and National Insurance Contributions (NICs) to HM Revenue & Customs (HMRC). It was, in essence, a tax mitigation scheme.
The decision is notable for considering at what point the duty to consider the interests of creditors arise?
The court held that the company was plainly insolvent from at least September 2005 and the duty to consider the interests of creditors arose from that point.
The claim had already been settled against the majority of defendants. The remaining defendant to the appeal was already bankrupt.
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