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Loveridge v Povey and Ors [2024] EWHC 329 (Ch)

Area of Law: Company

Dan McCourt Fritz KC and Ramyaa Veerabathran successfully represented the respondent controlling shareholder, Ivy Loveridge, in an application made by her son, Michael Loveridge, under paragraph 74 of Schedule B1 to the Insolvency Act 1986 (the “Insolvency Application”), seeking to prevent the administrators of Breton Park Residential Homes Ltd (“Breton Park”) from rescuing it as a going concern on the basis that the proposed rescue would be unfair to his interests, purportedly as a shareholder of the company.

HHJ Richard Williams (sitting as a High Court Judge) dismissed the Insolvency Application in a comprehensive judgment in Loveridge v Povey and Ors [2024] EWHC 329 (Ch). The Court confirmed that, in principle, it had jurisdiction to intervene if satisfied that no reasonable administrator could have concluded that it was reasonably practicable to rescue the company as a going concern when such a course of action would be contrary to the interests of the members as a whole, in circumstances where the company was balance-sheet solvent and its creditors would be paid in full in any event. However, the Court found that it would be wholly contrary to the fair administration of justice to allow Michael Loveridge to contend that his interests as a shareholder would be harmed by Breton Park’s proposed rescue in circumstances where he had absented himself from related Financial Remedy Proceedings in the Family Court, such that he was debarred from arguing that he had a beneficial interest in its shares. The Court further found that Michael Loveridge had pursued the Insolvency Application without any legitimate interest as a member and that it was instead an attempt to further his interest as a prospective purchaser of an asset of the company.

Dan McCourt Fritz KC and Ramyaa Veerabathran also successfully represented Ivy Loveridge in opposing an interim injunction application made by Michael Loveridge in Re Kingsford Caravan Park Ltd, an unfair prejudice petition in respect of another company of which Ivy is the majority shareholder. Michael Loveridge sought an interim injunction aimed at preventing the company’s funds from being deployed to facilitate the rescue of Breton Park (the “Injunction Application”). The Court dismissed the Injunction Application on the basis of its finding that a monetary award by way of appropriate adjustments to the buy-out valuation of Michael Loveridge’s minority shareholding in the company would constitute an adequate remedy for the relief sought under the unfair prejudice petition: Loveridge v Povey and Ors [2024] EWHC 329 (Ch).

Jennifer Meech appeared for two corporate respondents to the Insolvency Application, one of which was also a respondent to the Injunction Application. Those companies adopted a neutral stance on both applications.  

The High Court's judgment on both applications, which were heard together, can be found here.