BHS Group Ltd (in administration) v Retail Acquisitions Ltd

Company – Insolvency. The Companies Court granted a petition, presented by BHS Group Ltd (in administration) (BHS), for the winding up of the respondent company (RAL). The petition was based on an unsatisfied demand, which arose from a loan (the loan) advanced by BHS to RAL. RAL had contended that, although the loan instalment had become due, under the loan, it had been paid by way of a set-off of liabilities due under a management services agreement. The court held that there was no cross-claim as to whether a set-off could be applied, which could give rise to a substantial dispute. The loan agreement, which restricted assignments, had not been varied and was binding. Further, the court held that the claimed set-off was not an asset, as RAL had argued, and that BHS had discharged the burden of proving that RAL was cash flow and/or balance sheet insolvent.

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