[2025] EWHC 2294 (Ch)

Summary of conclusions

For the reasons which I have given, I conclude that:

in relation to the preference claim, (a) the Applicant has failed to establish on the evidence a preference in fact; and (b) even if I am wrong in that conclusion, on the evidence as a whole I am satisfied that the presumption of desire to prefer has been rebutted; and

in relation to the transaction at an undervalue claim, (a) the Applicant has failed to establish a transaction at an undervalue on the evidence; and (b) even if the Applicant had been able to establish a small undervalue, the s.238 claim would still fail by virtue of s.238(5).

The Way Forward

For the reasons given I shall dismiss the Application.

In conclusion, I would add that, on the evidence which I have heard and read, in my judgment the Respondent has at all material times acted responsibly and with integrity as a director of the Company. He very properly sought and acted on the advice of a specialist firm of insolvency practitioners for several months prior to placing the Company into CVA, a process which involved a detailed review of the Company’s finances. He was utterly transparent in his dealings with Mr Adamson throughout the course of the CVA and reasonably relied on Mr Adamson’s advice when putting in place the salary/loan swap arrangement, motivated only by a wish to save the Company the PAYE and NIC that would otherwise have been payable on his salary. In doing so he genuinely believed that he was acting in the Company’s best interests. It is highly regrettable that he has been put through the stress of these proceedings.

I shall hear submissions on costs and any attendant matters on the handing down of this judgment.

ICC Judge Barber