Henderson & Jones Ltd v Ross: Rebecca Page acts for successful Defendant
Mr Justice Richard Smith has handed down Judgment in Henderson & Jones Ltd v Ross (and others)  EWHC 1276 (Ch) dismissing claims against all the defendants arising out of a corporate restructure of The Hospital Medical Group Limited.:
The claimant (a litigation investment company) brought claims as assignee of The Hospital Medical Group Ltd (in liquidation) (‘Company’) arising out of a group corporate restructure in 2012. It alleged the restructure was (i) for the purpose of defrauding creditors (particularly patients with claims arising from the 2012 PIP Breast Implant scandal and HMRC for VAT); (ii) at an undervalue; (iii) an unlawful return of capital/distribution; and (iv) an ‘informal winding up’. Claims were pursued against the de jure directors, the 3rd Defendant (a consultant project manager alleged to be a de facto director), the solicitors who advised on the restructure and Barclays Bank.
On 26 May 2023, Mr Justice Richard Smith handed down judgment dismissing all the claims. He found:
- The restructure was a genuine, bona fides group reorganisation undertaken for good commercial reason. It was not motivated by concerns about PIP claims or backdated VAT. Nor was it intended to defraud creditors.
- The restructure was not detrimental to the Company, at an undervalue or of no benefit.
- The Restructure was not an unlawful distribution and / or return of capital and / or informal winding up, nor contrary to s.423 Insolvency Act 1986.
- The Company was not cashflow insolvent or ‘borderline’ insolvent, nor was its insolvent liquidation or administration probable, at the time of the Restructure. Nor did the Company become insolvent (or ‘borderline’ insolvent) or its insolvent liquidation or administration a probability as a result of the restructure (applying BTI v Sequana)
- The directors did not act in breach of duty.
- The 3rd Defendant was not a de facto director, nor was he liable in negligence for services provided as a consultant project manager.
- The solicitors who advised on the restructure were not liable for negligence.
- Whilst in light of the above, no question of dishonest assistance or unlawful means conspiracy arose, the defendants did not act dishonestly.
The judgment is here.