Court denies application in Paragon Offshore PLC case

High Court Denies Application in Paragon Offshore PLC Case

The High Court of Justice, Business and Property Courts of England and Wales, recently ruled against Mr Michael R Hammersley's application concerning the insolvency proceedings of Paragon Offshore PLC. The case was presided over by Deputy Insolvency and Companies Court Judge Agnello KC.

Mr Hammersley sought permission to make an application in the ongoing insolvency proceedings of Paragon Offshore PLC, invoking CPR 23.12. His application followed a limited civil restraint order issued against him on 7 February 2022, which restricted him from making further applications without court permission due to previous applications deemed totally without merit.

In his latest attempt, Mr Hammersley aimed to issue a summary judgment application to be recognised as a creditor of the company. He also sought to file a claim against Mr David Philip Soden, a former joint liquidator of Paragon Offshore PLC, and Paragon Offshore Limited (New Paragon). His claims were based on alleged new evidence and a desire for pre-action disclosure.

The background to the case involves Paragon Offshore PLC's financial difficulties and subsequent protection under Chapter 11 of the US Bankruptcy Code. The Fifth Plan, approved by the US Bankruptcy Court, involved a debt-for-equity swap and the transfer of assets to senior creditors, leaving shareholders, including Mr Hammersley, with no recovery.

Judge Agnello KC reviewed the history of the case, including previous judgments, and reiterated that Paragon Offshore PLC was insolvent at the time of the administration order. The judge dismissed Mr Hammersley's assertions that he had a valid creditor claim, noting that his securities fraud claim had been subordinated and discharged in the US proceedings.

The judge also addressed Mr Hammersley's reliance on a supposed Pulsford claim, which he argued gave him a personal right of action against the liquidator. However, the court found that Mr Hammersley was not a creditor, and his claim lacked merit.

Ultimately, the court refused Mr Hammersley's application, maintaining the limited civil restraint order. The judgment underscored the court's position that Mr Hammersley's claims were attempts to relitigate issues already determined and lacked substance.

The decision highlights the complexities of cross-border insolvency proceedings and the challenges faced by shareholders in such cases.

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