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Re Glenn Maud; Edgeworth Capital (Luxembourg) SARL and anor v Maud [2020] EWHC 974 (Ch) is the latest in a series of judgments given by Snowden J in relation to attempts to bankrupt Mr Maud. The facts of the case are “labyrinthine” (the judge’s word) and need not concern us beyond noting that both the Libyan Investment Authority and Edgeworth  presented bankruptcy petitions against Mr Maud as long ago as 2015 and have been pursuing a bankruptcy order ever since. In fact they got there in 2019 when ICC Judge Briggs made a bankruptcy order, although it was overturned by Snowden J on appeal.

Snowden J’s latest judgment (which now looks as if it is leading inexorably back to bankruptcy this time) is interesting for what it says about three matters: the way in which the court deals with the position of supporting and opposing creditors, the approach it should take where a petition is presented abusively, i.e. for a purpose collateral to its real purpose (both topics which Snowden J addressed in prior judgments) and the discretion not to make an order where it would serve no purpose.

Snowden J addresses “the class question” in paras 71 ff of his judgment. His starting point is  a passage from a winding up authority, Re Leigh Estates (UK) Ltd [1994] BCC 292:

“Although a petitioning creditor may, as between himself and the company, be entitled to a winding-up order ex debito justitiae, his remedy is a ‘class right’, so that, where creditors oppose the making of an order, the court must come to a conclusion in its discretion after considering the arguments of the creditors in support of and opposing the petition: see Re Crigglestone Coal Company Ltd [1906] 2 Ch 327, in particular the statements of principle of Buckley J at first instance, and s. 195 of the Insolvency Act 1986…

It is plain from the well-known authorities on the subject that, where there are some creditors supporting and others opposing a winding-up petition it is for the court to decide as a matter of judicial discretion, what weight to attribute to the voices on each side of the contest…”

The judge next notes that the petitioner has no voice in the matter.

After reviewing the authorities and the submissions he concludes:    

“78. In my judgment, the authorities demonstrate that the starting point for the court in determining whether to give effect to the right of the class ex debito justitiae to a bankruptcy order or a winding up order, is to look at the value of debts of the creditors on each side of a disagreement among the class. However, it is also clear that the court's role in determining whether or not to give effect to the class remedy is not limited to a question of simple mathematics. The court will also look at the reasons advanced by the creditors on each side of the debate in order to assess whether those reasons are commercially rational and will have regard to other evidence to assess whether the weight and rationality of a particular creditor’s approach is diminished by any extraneous factors such as personal antipathy or affection on the part of the creditor for the debtor (or those connected with it in the case of a company)”.

He goes on to reject a proposition that the court must formulate some view of a hypothetical rational creditor who is a member of the class or impose its own view of the commercial merits or the best interests of the class. 

On the abuse question, Snowden J adopted again Rose J’s analysis on Mr Maud’s application to set aside the statutory demand served on him by the Libyan Investment Authority ([2015] EWHC 1626 (Ch)):

“29. In the light of these authorities I conclude that the pursuit of insolvency proceedings in respect of a debt which is otherwise undisputed will amount to an abuse in two situations. The first is where the petitioner does not really want to obtain the liquidation or bankruptcy of the company or individual at all, but issues or threatens to issue the proceedings to put pressure on the target to take some other action which the target is otherwise unwilling to take. The second is where the petitioner does want to achieve the relief sought but he is not acting in the interests of the class of creditors of which he is one or where the success of his petition will operate to the disadvantage of the body of creditors.”

He added, however, two points. The first:   

“[I]t will be an abuse of process if, even though the petitioner wants a bankruptcy order to be made, recovering its debt through the bankruptcy process is no part of its purpose. The example of that type of abuse in the authorities is the Irish case of McGinn v Beagan [1962] IR 364 which concerned the long-running personal feud between the town clerk of the Castleblayney Urban District Council and a town councillor. The town clerk took an assignment of debts owed by the councillor, and petitioned for his bankruptcy. The judge found, as a fact, that the town clerk did not have the purpose of recovering any money, but was motivated by the sole purpose of making the councillor bankrupt and unseating him from the town council”.


“The second point which I explained in my First Judgment is that a petition will not be an abuse of process if, in addition to wishing to receive a dividend on his debt in the bankruptcy together with other creditors, the petitioner has a collateral purpose which is not shared with the other creditors, but which will not cause them any detriment if achieved”.

In spite of the fact that the abuse question had been dealt with in an earlier judgment, Snowden J nonetheless held, “ I consider that Mr. Maud is entitled to reopen the question of Edgeworth's motives in pursuing its Petition from time to time.” On the facts, however, he concluded that Edgeworth had brought its petition, at least in part, with the purpose of seeking Mr Maud’s bankruptcy so there was no abuse.  In any event, he indicated that he intended to make the bankruptcy order on the prior Libyan Investment Authority petition.

Finally, Snowden J dealt with what is often called utility. Mr. Maud, supported by another creditor,  opposed the making of an order on the basis that bankruptcy would serve no useful purpose as there were no assets, other than some shares of doubtful value, from which creditors’ claims could be satisfied. That contention was rejected. There being evidence of the existence of some assets and dealings in the shares, Snowden J decided “I…cannot conclude that making Mr. Maud bankrupt will be a pointless exercise for his creditors.”


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