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IPS Law v Safe Harbour: Angel Group test applied—Chancery refuses to restrain advertisement of winding-up petition; no genuine dispute, set-off or abuse of process (England and Wales)

Published on: 13 January 2025

Published by a LexisNexis Restructuring & Insolvency expert
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IPS Law Llp v Safe Harbour Equity Distressed Debt Fund 3 Lp [2024] EWHC 2663 (Ch) What are the practical implications of this case?

The judgment is a lesson in slicing through wide‑ranging, intricate objections that practitioners too often encounter from companies resisting winding‑up petitions, aimed at surmounting what is frequently a comparatively low threshold of showing a genuine dispute on substantial grounds. Creditors and their legal representatives are likely to applaud the outcome when met with a haze of points raised to obscure the true issues. The court made clear it will devote the necessary time to examine and test voluminous, complex material to determine whether the petition debt is genuinely disputed on substantial grounds. The ruling also underlines the consequences of failing to adduce clear and convincing evidence—an omission that proved fatal here. This authority will be of real use to practitioners dealing with applications framed to cloud the core controversy, whilst serving as a warning to those who bring applications in that fashion of the risks inherent in attempting to obfuscate the real issues...

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