Few viewers of BBC2’s re-enaction of the events in 1940 will have known that a similar scene unfolded only 12 months ago – when the valiant heroes were business recovery specialists.
The drama revolved around the Dawn Merchant,a ship saved by an English administrator from the clutches of French officials, who seized the vessel at Dunkirk.
It was the finest example of how the old European administration order had been turned to rubble, demolished not by a fascist army, but European Union Regulation 1346.
Under 1346, the laws of the member country, where an administration order is first made, take precedence with no need for old-style validation in other European courts.
Cenargo Limited, the Dawn Merchant’s owner, had been placed in administration by the English High Court of Justice when the ship berthed, and was arrested in Dunkirk.
On learning of the ship’s seizure, Cenargo’s British administrator showed the English court order to the authorising French court. The French had no choice but to allow the Dawn Merchant to be taken safely from Dunkirk.
Chris Ashurst, a partner at Mazars, says: ‘It would be true to say that the French creditors were surprised at the impact of the English insolvency proceedings on their rights as they understood them under French law.’
But how can British insolvency practitioners avoid making similar mistakes? International law firm Holman Fenwick & Willan says checks should be carried out in a company’s”centre of main interests’, and other member states where it has ‘establishments’ before any seizure. Sadly, there is as yet no European database of insolvency proceedings to help with this.
Winston Churchill called Dunkirk ‘a miracle of deliverance’. The case of the Dawn Merchant demonstrates that retrieving seized assets from other member states need not be so tricky. Just don’t let anyone tell you the ‘Dunkirk spirit’ is dead.
- Brian Moher writes on business recovery for Accountancy Age.
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children