Re Mid East Trading Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 15 April 1997 |
| Date | 15 April 1997 |
| Court | Chancery Division |
Chancery Division
Before Mr Justice Evans-Lombe
Insolvency - rescission of winding-up order - stranger to liquidation - locus standi
A stranger to a liquidation has no locus standi to apply to rescind a winding-up order under rule 7.47 of the Insolvency Rules (SI 1986 No 1925) since it did not alter the pre-1986 law restricting such applicants to a creditor, a contributory, or the company jointly with a creditor or contributor.
Mr Justice Evans-Lombe so held in a reserved judgment in the Chancery Division when dismissing an application by the second respondents, Lehman Brothers Inc, ("LBI") against the joint liquidators, Mr Jonathan Phillips and Mr Paul Evans, the Official Receiver and a Mr Marwan Hakim, to rescind a winding-up order made against Mid East Trading Ltd, a company incorporated in the Lebanon.
His Lordship granted an application by the joint liquidators against four respondents, Lehman Brothers Holdings plc, LBI, Lehman Brothers International (Europe) and Lehman Brothers Ltd, for the production of documents under section 236 of the Insolvency Act 1986.
Mr Michael Crystal, QC and Mr Robin Dicker for the liquidators; Miss Susan Prevezer for the petitioning creditor; Mr Michael Brindle, QC, for the respondents.
MR JUSTICE EVANS-LOMBE said the liquidators' application arose from business transactions between Mid East Trading Ltd and certain of its associated companies and the respondents.
Mid East was owned and controlled by a Mr Daouk who, in the late 1980s through two other Lebanese companies, IFCO and Sigma, carried on the business of investment adviser and manager.
The business involved the introduction of investors to financial institutions through which those investors' funds were to be invested, the resulting commissions being shared between the institutions and Mr Daouk's companies.
Initially, Mr Daouk dealt through LBI's London office until 1992 when the accounts were transferred to Bear Sterns, a similar financial institution in New York.
In 1995 Mr Daouk was arrested in the Lebanon and Mid East was placed in liquidation by a Lebanese court on June 1. In September Mr Hakim, a creditor, presented a petition in the Chancery Division to wind up Mid East as an unregistered company under section 221 of the 1986 Act. On November 8 a winding-up order was made against Mid East by Mr Registrar Buckley. On December 11 the joint liquidators were appointed.
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