English court approval does not confer officeholders with total immunity from subsequent claims

Quick read

This case concerned the immunity of receivers from claims, where the Court had approved the sale of assets over which they were appointed.

Background

Following a dispute between two shareholders of Blackpool Football Club Limited (BFCL), receivers were appointed by the court over certain assets related to Blackpool Football Club, including the shares held by the majority shareholder in BCFL, Denaxe Limited (Denaxe).

During the marketing process, the receivers concluded the best way forward was to sell the assets as one complete package.

The receivers applied for an order permitting them to sell the assets as a package to "protect the football club and maximise value." The Court granted the order and the sale completed.

Denaxe subsequently claimed against the receivers on the basis that the assets should have been sold separately to maximise value.

Decision

The Court considered whether Denaxe should be prevented from bringing the claim because the sale had been sanctioned by the Court and Denaxe had not objected at the time the decision was approved, despite being served with the receivers' application.

Denaxe's claim was dismissed on the basis that it was an abuse of process, when Denaxe had already been provided with opportunity to object.

Key takeaways

Sanction by the Court of a decision does not provide an officeholder with total immunity from subsequent claims.
Officeholders should take care in identifying the scope and issues in any application for approval.
The extent of any immunity conferred on an officeholder depends on the nature of the approval granted by the Court and the identity of the parties to the approval decision and subsequent claims.