Vol 20 (2023) - Issue 1

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Manning v Neste AB [2022] EWHC 2578 (Ch)

Synopsis
The joint administrators of a bitumen supply company applied for directions on the validity of a floating charge pursuant to s. 245 of the Insolvency Act 1986.
The floating charge was granted by the company to its director at the time, Mr Farah. It was granted as security for loan notes issued by the company to Mr Farah in exchange for Mr Farah's transfer of the full shareholding of a cash-box company. The High Court held that the floating charge was exempt from avoidance under s. 245(2)(a) as the shares were 'good' consideration, given at the time of the charge's creation.
The court provided helpful guidance on the definition of 'consideration' in the context of s. 245, and, obiter, on how some models of restructuring can fall foul of s. 245.