Jurisdiction(s):
United Kingdom

Loveridge v Povey: paragraph 74 'unfair harm' clarified; bidder harm excluded; standing curtailed by Financial Remedy proceedings; American Cyanamid injunction refused; administrators’ refinancing approved (Chancery Division, England and Wales)

Published on: 07 March 2024

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Loveridge v Povey and others; Loveridge v Loveridge and other companies [2024] EWHC 329 (Ch)

What are the practical implications of this case?

The ruling offers welcome clarification on various facets of the test applied to applications under paragraph 74. It confirms that ‘unfair harm’ may arise either through disparate treatment or through decisions that are commercially irrational in nature, and that there is no separate, higher ‘perversity’ threshold to be applied when courts review administrators’ decisions and conduct. The court’s analysis of standing will be of interest to insolvency practitioners and others across practice areas. In holding that the applicant lacked adequate standing to pursue a paragraph 74 application, the court factored in the likely outcome of Financial Remedy proceedings, treating that probable result as relevant to the standing assessment. This is not only a notable instance of one court being prepared to assess the probable determination of another, but it also raised a distinct issue about the nature of the standing requirement. There is scope for debate as to whether the court’s approach to standing—namely, that the absence of a legitimate interest in asserting standing may prevent a party from doing so—could be applied more widely in other contexts...

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