CHP 12/0124, 0125, 0126, 0138, 0139, 0140 and 0163 judgment summary

News Publication Date: 01 February 2013

IN THE HIGH COURT OF JUSTICE OF THE ISLE OF MAN
CIVIL DIVISION
CHANCERY PROCEDURE

CHP 12/0124
FINANCIAL SUPERVISION COMMISSION Claimant
and
LOUIS GROUP STRUCTURED CAPITAL LIMITED (“Structured Capital”) Defendant

CHP 12/0125
FINANCIAL SUPERVISION COMMISSION Claimant
and
LG SP INVESTMENTS LTD (“LG SP”) Defendant

CHP 12/0126
FINANCIAL SUPERVISION COMMISSION Claimant
and
LOUIS GROUP INTERNATIONAL (EUROPE) LIMITED (“LG Europe”) Defendant

CHP 12/0138
FINANCIAL SUPERVISION COMMISSION Claimant
and
LOUIS GROUP SLN Limited (“LG SLN”) Defendant

CHP 12/0139
FINANCIAL SUPERVISION COMMISSION Claimant
and
LOUIS GROUP STRUCTURED FUND plc (“the Fund”) Defendant

CHP 12/0140
FINANCIAL SUPERVISION COMMISSION Claimant
and
LOUIS GROUP (IOM) Limited (“LG IOM”) Defendant

CHP 12/0163
LOUIS GROUP (IOM) LIMITED (“LG IOM”) Claimant

Judgment Summary issued by the High Court of Justice of the Isle of Man

This summary is provided to assist in understanding the judgment of the court. It does not form part of the judgment. The judgment itself is the only
authoritative document. The full judgment is available at www.judgments.im.

On 1 February 2013 His Honour Deemster Doyle First Deemster and Clerk of the Rolls sitting in the High Court of Justice of the Isle of Man Civil Division Chancery Procedure delivered detailed reasons for judgment which concerned two issues.

The first issue was whether without notice orders appointing Provisional Liquidators should be set aside.

The second issue was whether winding up orders should be made against the Defendants. The Commission had presented claims for the winding up of Structured Capital, LG SP, LG Europe, LG SLN, the Fund and LG IOM in the public interest. LG IOM had also presented its own claim for a winding up order on the basis that it was unable to pay its debts.

On the first issue the Deemster was not persuaded that the without notice orders should be set aside. The Deemster concluded that (1) the terms of the without notice orders were justified and (2) the appointments were necessary and proportionate and (3) there were no material non-disclosures that would justify setting aside the orders. Moreover the evidence before the court revealed that winding up orders needed to be made in the public interest.

On the second issue having conducted the balancing exercise referred to in Law Investments Limited 2005-06 MLR 73 the Deemster concluded that it was proper for the companies to be wound up in the public interest. The Deemster referred to (1) the need for investigation (2) the lack of financial information (3) the lack of documentation to evidence important transactions (4) the lack of confidence in the past and future management of the companies (5) the lack of openness and lack of co-operation (6) the evidence in opposition to the winding up claims and (7) the compelling and overwhelming case for the winding up orders.

For the avoidance of doubt the Deemster made it clear that in respect of LG IOM he made a winding up order on the Commission’s claim on the basis of proper in the public interest and on LG IOM’s claim on the basis of its inability to pay its debts.

There was a clear public interest in winding the companies up and such was not outweighed by any countervailing considerations.

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