Change of position defence rejected in novel circumstances

Date: 9 May 2023

Court: High Court of Justice, Business and Property Courts in Leeds

Judgment has recently been handed down in a case where a company in liquidation, acting by its liquidator, sought restitution of monies paid to a connected company after presentation of the winding-up petition under s. 127 of the Insolvency Act 1986. The recipient had already unsuccessfully applied for a validation order, but sought to raise a change of position defence in response to the s. 127 application. That defence was not only rejected on the merits, but the Court held that the defence was bound to fail because an essential element of the defence was barred by res judicata principles, or the doctrine of abuse of process.

Jessica was instructed by Shevy Narendra, Frank Jones and Oliver Nelson of Weightmans LLP.

Practice Area: Insolvency