Cooper & Anor v Blackpool Football Club (Properties) Ltd & Ors

A receiver by way of equitable execution may seek court approval for a transaction of exceptional importance. The court’s review is supervisory. It must be satisfied that the transaction is lawful, within the receiver’s powers, genuinely considered beneficial, rational and honest. It must not substitute its own commercial judgment.

Under CPR 3.1(7), a final order cannot be revisited merely to correct the judge’s own decision. However, an order may contain interlocutory machinery capable of variation where material subsequent circumstances make variation necessary to give practical effect to the original relief. The sale of the football club was approved, and the share-transfer arrangements were varied accordingly.

The proceedings arose from an unfair prejudice petition under section 994 of the Companies Act 2006. The court had ordered the respondents to purchase the petitioner’s minority shareholding in Blackpool Football Club for £31,270,000, but most of the judgment debt remained unpaid. Receivers by way of equitable execution were appointed over football-related assets and sought approval for a sale of the Club as a going concern.

The proposed transaction required the petitioner’s shares to be transferred directly to the purchaser, although the earlier order contemplated their transfer to the respondents. The issues were whether court approval was required, whether the earlier order could be varied under CPR 3.1(7), and whether the proposed sale should be sanctioned.

1. Court approval. The Receivers were entitled to seek approval for the proposed sale and had acted appropriately in doing so. The sale was a momentous decision affecting the interests of both the judgment creditor and judgment debtor. The court’s function was supervisory, not commercial. It had to ensure that the proposed exercise was lawful, within the Receivers’ powers, genuinely considered beneficial, rational and free from conflict. It would not withhold approval merely because it might have adopted a different course (Re Nortel Networks UK Limited [2016] EWHC 2769 (Ch)).
2. Variation under CPR 3.1(7). The earlier order was partly final and partly interlocutory. The findings that unfair prejudice existed, that a clean-break buy-out was appropriate, and that £31,270,000 was payable were final and could not be revisited. The machinery governing timing and implementation of the transfer was capable of variation.
3. The jurisdiction under CPR 3.1(7) was rare and could not be used as an appeal from the judge’s own final order. Material subsequent changes nevertheless justified varying the interlocutory aspects here. Those changes included persistent non-compliance, unsuccessful enforcement measures, the appointment of Receivers, and the discovery that the Club could not be sold as a going concern without including the petitioner’s shares (Tibbles v SIG plc [2012] EWCA Civ 518; Terry v BCS Corporate Acceptances Limited [2018] EWCA Civ 2422).
4. The order was varied so that the petitioner’s transfer of its shares to Bidder 1, and Bidder 1’s payment of the consideration to the Receivers, were deemed to constitute both the respondents’ purchase of the shares and their onward sale to Bidder 1.
5. Sanction of sale. Applying the Re Nortel Networks UK Limited criteria, the proposed sale was within the Receivers’ powers, followed a competitive process, produced a reasonable price, and represented the best and most credible bid. Urgency also supported completion because the Club required funds to avoid serious financial difficulty. The sale was sanctioned.