The Supreme Court has recently refused permission to appeal on the basis that the application, in the case, did not raise an arguable point of law which could lead to a successful outcome for the appellant and that the appellant had no real prospect of success on the issue as to perversity. This was the outcome in Lock v Stanley and Another (Re Edengate Holmes Ltd) [2022] (16 September 2022). This decision sends a strong message reinforcing the high threshold required to successfully challenge the assignment of claims, as well as the Courts’ hesitance to interfere in the commercial decisions of insolvency practitioners. Background The claimant, Mrs Lock, was a creditor and former director of Edengate Homes (Butley Hall) Ltd (in Liquidation) (‘the company’), a firm whose only asset was a claim against her and members of her family. In March 2012, Mrs Lock and her husband formed the company as a special purpose vehicle to acquire and develop Butley Hall, Prestbury, Cheshire, which was a Grade II listed mansion house. The company was unable to raise sufficient funds to meet its liabilities under the project and by November 2015 was insolvent. On 26 November 2015, the company went into creditors’ voluntary liquidation and liquidators were appointed. Following an investigation by the liquidators, it was discovered that there were potential transactions at an undervalue and statutory preference claims against the claimant, her husband and others. The liquidators went on to assign these causes of action and statutory claims to a specialist insolvency litigation financing company, Manolete Partners plc (‘Manolete’). Mrs Lock sought an order to set aside this assignment under Section 168(5) 40 LAWYERMONTHLYMARCH 2023 Special Feature The UK Supreme Court’s recent judgment in Lock v Stanley and Another has raised significant implications for the threshold required to appeal an assignment of claims. In light of the ruling, Rosling King partner Kate Rigby examines the prospect of success regarding perversity of findings when trying to challenge the assignment of claims in the event of insolvency. TheThreshold for PerversityWhen Challenging the Assignment of Claims
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