Freezing orders are an essential tool by which the courts ensure that alleged wrongdoers have no opportunity to disperse their assets prior to judgment or enforcement action. However, a Court of Appeal case has underlined the salutary duty on those who apply for such orders to give full and frank disclosure.
The case concerned a falling out between three brothers who were all directors of an online gaming company. Two of them had accused their sibling of transferring the company’s assets and business opportunities to another company over which he had sole control. He was also alleged to have received £3.8 million in unauthorised remuneration. He denied those allegations and countersued his brothers, claiming that they had unfairly prejudiced his interests as a minority shareholder.
Via the company, the brothers brought proceedings to recover assets and money which their sibling was alleged to have misappropriated. They obtained an asset freezing and property preservation order against him and various companies that he controlled. A search and seizure order was also executed at his home.
He argued that those orders had been improperly obtained on the basis of false and misleading assertions. There had, he submitted, never been any real risk that he would seek to dispose of assets or evidence. In dismissing his appeal, however, the Court found that the disclosure made before the orders were granted was sufficiently full and frank and painted a picture of alleged dishonesty.
If you would like help or assistance on this matter or other related insolvency matters, please contact Leanne Schneider-Rose on 0121 698 2200 or email l.schneider-rose@sydneymitchell.co.uk.
 |
 |
 |
 |
 |
 |
|
