Vol 19 (2022) - Issue 4

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Re Edengate Homes (Butley Hall) Limited (In Liquidation) [2022] EWCA Civ 626

Synopsis
A former director who was also a creditor of a property development company sought to challenge the liquidator's assignment of a claim against her and parties connected to her to a litigation funder under section 168(5) of the Insolvency Act 1986. The Court of Appeal dismissed her appeal, agreeing with the first instance decision that she lacked standing under section 168(5) as, despite being a creditor, her application was not brought in her capacity as a creditor and was adverse to the creditors' interests as a whole. The Court also found that even if she had standing, the liquidator's decision to assign the claim did not cross the high threshold required to set it aside, which required the liquidator's actions to be 'perverse'.