“2. Spread betting is not so much or not merely a bet, although it can be described as such, as a form of contract for differences. It enables a customer to take a position on a market (or an event) for a very small stake. Thus if the Dow Jones Index is, say, at 10,000, one can “buy” or “sell” the market at a spread around the index of, for the sake of example, 10 points either way, 9990 to 10,010. If one buys, one is betting that the market will rise above 10,010. If one sells, one is betting that the market will fall below 9990. If one buys and the market rises, one stands to gain£1 for every point that the index exceeds 10,010. If one sells, and the market falls, one stands to gain£1 for every point that the index falls below 9990. If, however, one calls the market wrong, then one will stand to lose£1 for every point that the index exceeds the spread point in the wrong direction. Thus if one sells at 10,000 with a sale spread point at 9990, one will make£1 for every point the market falls below 9990 and lose£1 for every point the market rises above 9990. Until the bet or “trade” is closed, the gains and losses are merely “running” gains or losses. They are real enough, but constantly changing with every change in the index, and have not yet been fixed. Closing the bet will fix the position, win or lose. Unlike a classic bet, the customer can of course lose more than his stake. Indeed, on the example given, of a sale spread point of 9990 when the market is at 10,000, if the market does not move an inch, the customer will lose£10 for every£1 staked. Nor, again unlike a classic bet, are his winnings fixed at the outset by an agreement on odds. In theory winnings based on rising markets are infinite (in practice of course they are not) and losses based on falling markets are limited only insofar as they cannot exceed the consequences of a fall in the index to zero. 3. Normally, of course, to gain by£1 for every rise (or fall) of a single point in a stock market index such as the Dow Jones would take an investment of significantly more than£1 . In effect, one’s£1 bet commands a position in the market significantly greater than the stake. In other words, there is a large element of gearing in the trade, and the situation is correspondingly volatile. Where the market in question is itself in a volatile phase, the risks become even greater. Thus, if the Dow Jones is capable of moving within a range of 100 or 200 points in a single day, the customer can be£100 to£200 richer or poor per£1 stake within a matter of hours of his trade. On a trade of£100 , those figures become£10,000 to£20,000 ”
“The defence of want of liability has, in my view, grown organically. It has been created in response to [Tradindex’s] evidence”
“Investments – shares Hornby St and other Co’s£150,000 ”
“ Monecor Limited/Tradindex£4,270,000 Mrs Samina Ahmed£ 35,600 France Affairs/Intra Communications£1,250,000 Kashif Ahmed/R. Singh£3,250,000 Saeeda Ahmed£1,100,000 M . Bhatti£ 235,000 Go Wealthy LLC – Dubai£ 800,000 HM Revenue & Customs – income tax£ 130,000 HSBC Bank plc – shortfall on securities£7,475,000 _________ Total£18,545,600 ”
“We note that a number of Mr Ahmed’s creditors are his family or employees and the value of the debts owed to these creditors, as put forward by Mr Ahmed, has varied substantially in recent months. In such circumstances, our client has serious and reasonable doubts as to the fullness or candour of the information provided by Mr Ahmed and we expect you to have taken such steps as are reasonable to satisfy yourself that… (b) Mr Ahmed’s true position as to assets and liabilities does not appear to you in any material respect to differ substantially from that which it is represented to the creditors to be”
“4. Shareholding in Hornby Street I own a minority shareholding of approximately 25% of my family business, which comprises of a group of companies. These companies have experienced a protracted period of reorganisation and reconstruction, and it is therefore not possible to place an accurate valuation on these shares. For the purposes of the IVA, a value of£150,000 has been included in the statement, representing the value my brother would be prepared to pay to buy out my interest in the Group… 7. Mrs Samina Ahmed This represents a prudent estimate of the monies borrowed from my wife in recent years… 9. Kashif Ahmed/Ranjit Singh My main trading activities were funded by loans from my brother. In recent years, because I increased the volume of trading I found it particularly more easily to open up larger positions with spread betting organisations if he traded using other individuals accounts. Mr Singh was one of those individuals who was funded by way of my brother to assist me in opening up larger positions. I also borrowed money from my brother to bridge the gap between my earned income and living expenses. 10. Saeeda Ahmed I was advanced a loan from my mother in 2003 to assist with my financial difficulties at the time. The monies were raised by way of an increased mortgage on her private home in Manchester. 11. M. Bhatti This represents a personal loan to me”
“5.22(1) Subject as follows, at the creditors’ meeting the chairman shall ascertain the entitlement of persons wishing to vote and shall admit or reject their claims accordingly. 5.22(2) The chairman may admit or reject a claim in whole or in part. 5.23(3) The chairman’s decision on any matter under this Rule or under paragraph (3) of Rule 5.21 is subject to appeal to the court by any creditor or by the debtor. 5.22(4) If the chairman is in doubt whether a claim should be admitted or rejected, he shall mark it as objected to and allow votes to be cast in respect of it, subject to such votes being subsequently declared invalid if the objection to the claim is sustained. 5.22(5) If on an appeal the chairman’s decision is reversed or varied, or votes are declared invalid, the court may order another meeting to be summoned, or make such order as it thinks just. The court’s power to make an order under this paragraph is exercisable only if it considers that the circumstances giving rise to the appeal are such as give rise to unfair prejudice or material irregularity. 5.22(6) An application to the court by way of appeal against the chairman’s decision shall not be made after the end of the period of 28 days beginning with the first day on which the report required by section 259 is made to the court. 5.22(7) The chairman is not personally liable for any costs incurred by any person in respect of an appeal under this Rule”
“Subject to this section, an application to the court may be made, by any of the persons specified below, on one or both of the following grounds, namely – (a) that a voluntary arrangement approved by a creditors’ meeting summoned under section 257 unfairly prejudices the interests of a creditor of the debtor; (b) that there has been some material irregularity at or in relation to such a meeting”
“In my view, the task of the court, on an appeal under r 4.70(4) of theInsolvency Rules 1986 , is simply to examine the evidence placed before it on the matter and come to a conclusion whether, on balance, the claim against the company is established and, if so, in what amount. I would only add that, in considering the matter, the court is not confined to the evidence that was before the chairman at the time that he made his decision but is entitled to consider whatever admissible evidence on the issue the parties to the appeal choose to place before the court”
“My Lords, the late Sir Arthur Conan Doyle in his book The Sign of Four, describes his hero, Mr Sherlock Holmes, as saying to the latter’s friend, Dr Watson: “How often have I said to you that, when you have eliminated the impossible, whatever remains, however improbable, must be the truth?”
“By the early 90’s the repositioned business that I was now directing (with my Father taking a back seat) was turning over in excess of£45m . That is quite a lot of money now, but was a considerable amount of money in the early 90’s. In these successful times, I shared the success with my younger brother, Kashif, and with other members of my family to whom I was very generous with the result that the whole family shone in reflected glory from the wealth I was accumulating through my sound business decisions”
“Amounts in respect of items representing assets or income may not be set off against amounts in respect of items representing liabilities or expenditure (as the case may be), or vice versa”
“director’s loan”£629,000 and “other debtors”£1,706,000 . The Respondents argued that the “director’s loan” figure included the 2002/2003 loan of£604,758 whilst the “other debtors” figure included the 2003/2004 loan of£1,687,740 . I do not accept this either. The Debtor was not a director of Hornby Street at any time during the relevant year so there is no reason why any loan to him would have been classified as a “director’s loan”
“A loan to E Ahmed of£122,000 (2006 £Nil). The maximum amount owing on this loan during the year was£122,000 (2006 £Nil). The loan has no fixed repayment terms and carries no interest”
“In order to determine whether there had been a material omission [the Deputy Judge] asked himself whether, had the truth been told, it would be likely to have made a material difference to the way in which the creditors would have considered and assessed the terms of the proposed IVA. I consider that that is the correct approach, so long as the question is to be answered objectively, and so long as it is borne in mind that as well as the creditors which were represented at the meeting on20 December 1999 , Mr Cooper held proxies for a number of creditors which were not present by their own representatives”
“Where doubts reasonably arise, the nominee will have to satisfy himself as to the amount and quality of such information to such a degree that from it he is able to arrive at what seems at the time and at least to him to be a fair prima facie or provisional view as to whether a particular claimant should be admitted or rejected in respect of his claim for voting purposes and as to what figure, if any, an “agreement” should be reached in order to attribute a minimum value for voting purposes to an unliquidated or unascertained debt…The existence by way of s.262 of a mechanism that permits a creditor to be, say, allowed to vote at£1 and then to object and of a provision that enables a creditor to appeal to the court plainly does not license the nominee to proceed in the meeting upon a view which he knows to be unfair”
“Although Parliament has not set out what tests the nominee should apply before concluding that a meeting should or should not be summoned, that DTI letter represents, as it seems to me, a fair view in general terms of responsibilities which the legislation casts upon a nominee. It is not, though, to be expected that in every case the nominee will personally have verified every figure and have tested every part of the proposal. Often, for example, the financial resources available to him to fund the enquiries that would be necessary to do that will be very limited or the figures may be plain and undoubted. But within the scheme of the 1986 Act as discernible from the powers and duties given to the nominee it is, in my judgment, to be expected, as a minimum, of the nominee, at least in those cases where the fullness or candour of the debtor’s information has properly come into question, that the nominee shall have taken such steps as are in all the circumstances reasonable to satisfy himself and shall have satisfied himself on three counts. Leaving aside compliance with the formal requirements of the 1986Act and the Insolvency Rules 1986 they are, first that the debtor’s true position as to assets and liabilities does not appear to him in any material respect to differ substantially from that which it is to be represented to the creditors to be, second that it does appear to him that the debtor’s proposal as put to the creditors’ meeting has a real prospect of being implemented in the way it is to be represented it will be. A measure of modification to proposals is possible under s.258 so this question is to be approached broadly. Third, that the information that he has provides a basis such that (within the broad limits inescapably applicable to what have to be the speedy and robust functions of admitting or rejecting claims to vote and agreeing values for voting purposes) no already-manifest yet unavoidable prospective unfairness in relation to those functions is present”
“Reverting, then, to only the three counts I have mentioned, what steps are reasonable in the circumstances for the nominee to satisfy himself will, inevitably, depend on a host of variables such as the strength of the grounds for such questions or doubts as shall have arisen, their materiality to the propriety or feasibility of the debtor’s proposals, the quality of the debtor’s answers to the nominee in intended resolution of those doubts, the ease or difficulty with which independent enquiry by the nominee may resolve any continuing doubts, the expense entailed in such further enquiry and the availability of funds to meet that expense. Plainly, the less enquiry the nominee undertakes, the more important, in terms of reliance upon it, becomes the fullness and candour of the information provided by the debtor. If, for whatever reason, the nominee’s enquiries in questionable cases have been so restricted or unsatisfactory that the nominee would be unable to assure creditors that he had satisfied himself that those three minima were met, then he should not unequivocally report, under s.256(1)(a), that in his opinion a meeting of creditors should be summoned. Where such doubts have reasonably arisen it cannot be right for the nominee unquestioningly to accept whatever is put in front of him on the supposed basis that it is not for him but for the creditors to accept or reject the proposal; it is fundamental to the intended operation of IVAs that what the creditors vote upon is not the debtor’s raw material but a proposal that, at least to the qualified extent I have described, has survived scrutiny and which, at least to that extent, has commended itself to an independent professional insolvency practitioner as proper to be put to, and capable of being not unfairly voted upon by, the creditors.”
“Had Mr Cooper been informed on that day of an important new development which ought to have been reported to those for whom he held proxies it would on the face of it have been his duty to adjourn the meeting and report to the other creditors, even if that meant having to obtain an extension of time (under section 376 of the Act)”
“In my judgment the scheme of the meeting rules in r 5.17 is quite plainly a simple one. As one would expect the meeting is not the place to go into lengthy debates as to the exact status of a debt, nor is it the time to consider such matters as this court, sitting as the Companies Court, frequently has to consider as such whether a debt is bona fide disputed upon substantial grounds, an issue which leads to a great deal of litigation and frequently takes a day or so to decide. None of that could possibly be a suitable process to be embarked upon at a creditors’ meeting. The scheme is quite clear. The chairman has power to admit or reject; his decision is subject to appeal; and if in doubt he shall mark the vote as objected to and allow the creditor to vote…It provides a simple clear rule for the chairman, not a lawyer, faced at a large meeting with speedy decisions necessary to be made to enable the meeting to reach a decision. On that basis the chairman must look at the claim; if it is plain or obvious that it is good he admits it, if it is plain or obvious that it is bad he rejects it, if there is a question, a doubt, he shall admit it but mark it as objected”
“One of the difficulties in this case stems from the fact that Mr Mond, the insolvency practitioner, made common cause with the debtor. There is inherent danger in adopting any such stance. Insolvency practitioners should be much more careful to preserve utter independence from any party, either the debtor or any creditor.”