High Court clarifies statutory demands in bankruptcy

In a significant ruling delivered on 3 June 2025, the High Court decision in Michel Marie Raoul Gerard Péretie v Eden Farm SRL sheds light on the intricate nature of statutory demands within bankruptcy contexts. Deputy Insolvency and Companies Court Judge Parfitt's judgment addresses an application to set aside two statutory demands brought against Michel Péretie by the respondent, Eden Farm SRL. Central to the case is the assertion that enforcing these demands is impossible due to a dispute regarding the underlying debt.

The statutory demands, issued on 12 and 14 February 2024, relate to a debt stemming from a Loan Note Deed associated with the London Equity Property Projects Limited (LEPP), where Péretie had served as a director and shareholder. The key issue revolves around an alleged personal guarantee for LEPP’s outstanding debts of £700,000, compounded by interest. However, the applicant argues that he did not sign the guarantee and that his signature was either forged or made without his authorisation.

In exploring the application, Judge Parfitt emphasises the necessity of determining whether the debt is genuinely disputed on substantial grounds. The respondent maintains that a letter signed by Péretie constitutes a guarantee for the loan extended to LEPP, yet the applicant counters this, stating the document is vague and unenforceable, claiming he did not put pen to paper at all.

The court's examination also referenced Rule 10.5 of the Insolvency (England and Wales) Rules 2016, which enables courts to set aside statutory demands if a genuine triable issue exists concerning the disputed debt. The judge stresses the importance of establishing grounds for disputing the debt effectively.

Further complicating the circumstances, Péretie's residence in Dubai raised issues regarding jurisdiction. The applicant’s defence argued that any bankruptcy petition lodged in England and Wales would lack jurisdiction, necessitating a stay of proceedings — a factor that introduces significant complications in cross-border insolvency situations.

Judge Parfitt also critically reviewed the statutory demand process, aiming to protect parties from bankruptcy petitions based on contested debts. The ruling, which incorporated an evaluation of communication trails including emails and the roles of involved parties during the loan agreement, reflects a balanced approach to justice.

Ultimately, the court ruled in favour of the applicant, recognising the genuine dispute concerning the guarantee's authenticity and consequently set aside the statutory demands. This outcome reaffirms the judiciary’s dedication to ensuring that financial decisions are grounded in sound legal principles and evidential clarity.

The Péretie v Eden Farm SRL case stands as an essential reference point within insolvency law, specifically concerning international financial disputes. It underscores the importance of scrupulous documentation practices to circumvent complexities arising from clarifications on personal guarantees, thereby serving as a crucial reminder of the careful navigation necessary in insolvency and company law.