The liquidators and administrators from the same firm applied for directions in relation to their strategy of trying to maximise the sale value of the freeholds by selling them free of the leasehold interests in return for the leaseholders sharing in the sale proceeds.
The leaseholders, on the other hand, represented by the Respondents, argued that the value lay in the leaseholds, not the freeholds, and that the Applicants should transfer the freeholds to the leaseholders for no or little value to assist leaseholders who alleged that a Ponzi scheme fraud had been perpetrated against them.
The Applicants sought an order from the Court akin to the jurisdiction under Re Berkeley Applegate that their costs of negotiating with the leaseholders etc be paid out of the proceeds, to give them security in respect of the recovery of their costs, regardless of where the value lay – in the freehold or leasehold interests.
However, the court declined to make the declarations sought describing them as “without purpose” and left the officeholders with the knotty problem of how to extract value from the situation.
In the matter of CHF 2 Limited [2020] EWHC 2685 (Ch)