Vol 20 (2023) - Issue 4

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Sova Capital: A ‘Special’ Special Administration

Synopsis
The case of Re Sova Capital Limited (in special administration) [2023] EWHC 452 (Ch) generated and continues to generate interest in insolvency circles, rightly. Having acted on the case, we set out its key takeaways that Sova gives rise to (and leaves open, arguably), as we see it, for insolvency professionals. Sova provides, for the first time, authority for the use of 'unsecured credit bids', where an unsecured creditor can look to purchase assets of the estate in exchange for the waiver of its claim. What does this mean in practice?
For our part, DMH Stallard (Partners Matt Akers and Michael Lynch) acted for a creditor of Sova ('BZ') who highlighted various concerns he had regarding the JSAs' applications to obtain court approval for the unsecured credit bid transaction, its effect on him and other creditors and his treatment by the JSAs as a creditor and rival bidder.
On 2 March 2023, Mr Justice Miles handed down judgment on the expedited applications made by David Philip Soden, Ian Colin Wormleighton and Stephen Browne of Teneo, as Special Administrators ('JSAs') of Sova Capital Limited (in Special Administration) ('Sova').