BHD’s Liquidators submitted a proof of debt in the CVA, which identified preference payments from BHD to the Company in the sum of c. £841,000. The Supervisors of the CVA rejected the proof of debt on the basis that no-one was entitled to vote in respect of the claim advance by the Liquidators at the date of the CVA, the Liquidators, in whom the claim vested, not having been appointed. The Liquidators appealed this decision on the basis that the preference claim qualified as a provable contingent debt.
The court held that:
- The Liquidators were bound by the CVA, which bound every person who in accordance with the rules “would have been… entitled [to vote in the qualifying decision procedure by which the creditors’ decision to approve the CVA was made] if he had had notice of it.”. At the time of the CVA, BHD had an established legal relationship with the Company, which could give rise to a contingent debt. Further, the Judge noted that it is desirable that as a class contingent claims are bound.
- The Liquidators of BHD were entitled to proof in the CVA – the claim was both contingent and provable.
- The valuation of the proof should be remitted to the Supervisors of the CVA; there was nothing to justify the court determining the value of the proof.
In the Matter of North Point Global Ltd sub nom (1) Louise Mary Brittain (2) Matthew John Waghorn (Joint Liquidators of Baltic House Developments Ltd) v Michael Chamberlain (Supervisor of a Voluntary Arrangement relating to North Point Global Ltd) [2020] EWHC 1648 (Ch)