Individual Voluntary Arrangement Of Raymond Hugh Gallogly v Recognition Of Cross Border Insolvency Proceedings (Approved)

Factual and Procedural Background

This opinion records an ex parte application by the Applicant, an insolvency practitioner based in The State, seeking recognition and enforcement in this jurisdiction of an Individual Voluntary Arrangement ("IVA") entered into by the Debtor in The State. The application was heard in the Chancery 2 motion list on 1 December 2025 and an ex tempore decision was given; this written note follows review of the hearing recording. The Debtor entered the IVA under Part VIII, Chapter II of the Insolvency Order 1989 of The State. The Applicant was appointed nominee and supervisor; the IVA was registered in the High Court of The State in October 2023, approved by creditors on 19 October 2023 and became final. The Debtor's principal creditor was Company B, which held a claim of £150,000; another creditor held £8,000. The IVA proposed a dividend of £10,000 funded by the Debtor's mother. Company B voted in favour of the IVA but, due to legal changes following Brexit, Company B required an order from this Court to accept and process the dividend and to give effect to the debt write-off. The Applicant swore an affidavit grounding the application and instructed Attorney Farry of Company A to make submissions to the Court.

Legal Issues Presented

1. Whether this Court has an inherent jurisdiction to recognise and enforce an IVA entered into in The State (outside the European Union) in respect of a personal insolvency arrangement.
2. Whether the approach and factors identified in prior decisions concerning recognition of cross-border corporate insolvency arrangements (specifically Re Mount Capital Funds and Re Mercer Agencies) apply by analogy to a personal insolvency arrangement.
3. Whether, applying those factors, recognition and enforcement should be granted in this case (including whether recognition is sought for a legitimate purpose, compliance with foreign law, absence of public policy contravention, finality, notice to creditors and fairness).
4. Whether the Court should make orders recognising and enforcing the IVA and staying enforcement actions by the principal creditor pending performance of the IVA.

Arguments of the Parties

Applicant's Arguments

• The IVA is a statutory debt resolution mechanism which, once approved, binds creditors and operates as an alternative to bankruptcy.
• The Applicant was lawfully appointed and the IVA was registered and approved in The State; Company B voted in favour.
• Company B requires an order from this Court to accept and process the dividend payment as a consequence of post-Brexit legal changes.
• By analogy to the approach in Re Mount Capital Funds and Re Mercer Agencies, the Court has inherent jurisdiction to recognise foreign insolvency proceedings and the factors identified in those authorities are met here.
• The Applicant's affidavit addresses the relevant factors (legitimate purpose, compliance with The State's law, procedures followed, absence of public policy contravention, fairness, finality and notice to creditors).

Table of Precedents Cited

Court's Reasoning and Analysis

The Court identified the central novelty of the application as seeking to extend principles previously applied to corporate cross-border recognition to a personal insolvency arrangement. It accepted the Applicant's submission that the authorities cited set out the relevant approach. Applying the factors identified in Re Mount Capital Funds (and reiterated in Re Mercer Agencies), the Court examined the affidavit and submissions and found as follows:

• Recognition is sought for a legitimate purpose: the IVA produces a small dividend to Company B which would not be available in bankruptcy.
• The IVA complied with the law of The State (the Insolvency Order 1989 of The State) and was duly registered and approved by creditors.
• The procedures required under that law were properly followed.
• The IVA does not contravene public policy or the principles of the equivalent personal insolvency regime in this jurisdiction.
• There is no unfairness to creditors; they would fare worse in a bankruptcy scenario.
• The IVA is final rather than provisional.
• Proper notice was given to creditors, and Company B had been written to and indicated the application was required to permit it to accept the dividend.

On that basis the Court concluded it possesses an inherent jurisdiction to make the orders sought and that the relevant factors had been satisfactorily addressed in the Applicant's affidavit and submissions.

Holding and Implications

THE COURT RECOGNISES AND WILL ENFORCE THE IVA IN THIS JURISDICTION.

Direct effect on the parties:

• The Court ordered recognition of the IVA of the Debtor, as approved by creditors on 19 October 2023 and registered in the High Court of The State under the stated registration number.
• The Court ordered recognition and enforcement of the terms of the IVA in this jurisdiction specifically in respect of Company B's claim of £150,000.
• The Court ordered that any enforcement actions by Company B in respect of the Debtor's debt be stayed pending fulfilment of the IVA terms as recognised by the Court.
• The Court granted liberty to apply and directed the Applicant to serve a copy of the Order on Company B and notify it of the liberty to apply.

No broader legal precedent was announced beyond the application of the inherent jurisdiction and the factors identified in the cited authorities; the decision's practical consequence is the recognition and enforcement of the specific IVA and the stay of enforcement by the principal creditor.