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The Degrouping
The Degrouping
On 30 June 2008, CPW ceased to be a member of the CPW Chargeable Gains Group. The Degrouping involved the following two steps:
on 20 June 2008, CPWG plc transferred 100% of the share capital in CPW to a newly–incorporated company, originally called CPW Distribution Holdings Limited but later renamed Best Buy Europe Distributions Limited (“BBED”). At this stage, BBED was a wholly–owned subsidiary of CPWG plc. Despite the date of the transaction’s being agreed between the parties, neither party has been able to locate a copy of the contract for this transaction; and
on 30 June 2008, the CPW Group sold 50% of the issued share capital of BBED to Best Buy Distributions Limited. Best Buy Distributions Limited was a member of the BB Group and a wholly–owned subsidiary of BBCo. This sale was achieved by the parties’ entering into a conditional sale and purchase agreement on 7 May 2008 which took effect on 30 June 2008.
By an agreement dated 10 January 2009 (with a stated effective date of 1 July 2008), BBED purchased the entire issued share capital of BBUK from BBCo.
- Heading
- Introduction
- Key parties
- Acquisition of the Businesses
- The SPA and the MSA
- The Degrouping
- Procedural background
- the agreed issues
- the agreements
- The SPA
- The MSA
- The Side Letter
- Initial observations on the Agreements and the Side Letter
- other documents
- The Prior SPAs
- The Property Services Agreement
- The Brand Licence
- The Accounts
- The Invoice
- “ About the matter we have finished checking
- “Partial closure notice (PCN)
- The issues – a summary
- Issue One – applicability of the authorities in relation to statutory construction
- Conclusion
- “15 In the task of ascertaining whether a particular statutory provision imposes a charge, or grants an exemption from a charge, the Ramsay approach is generally described – as it is in the statements
- Issue Two – the scope of the rule prohibiting assignment “in gross”
- Conclusion
- Issue Three – ownership of the Businesses following the execution of the Agreements
- Conclusion
- No provision in the Agreements for the transfer of the Businesses
- No provision in the Agreements for the transfer of assets other than Goodwill or the assumption of any liabilities
- No transfer of employees
- Did BBUK carry on the Businesses after the Agreements became effective?
- This meant that the only way that BBUK could carry on the Businesses was through CPW as its agent. In that regard, I do not doubt the fact that it is possible for a company to carry on a business thro
- Entitlement to the profits of the Businesses
- Conclusion in relation to the ability to dictate the overall strategy and direction of the Businesses and entitlement to the profits of the Businesses
- Final observations
- Conclusion
- Issue Four – assignment in equity
- Conclusion
- Issue Five – not the same asset
- Conclusion
- Issue Six – the relevance of the transaction effected by Agreements in the event that Section 179(3) applied
- Conclusion
- Issue Seven – the tax consequences of the transaction effected by Agreements in the event that Section 179(3) applied
- Conclusions