Bankruptcy order against Bahamas-based investor upheld over £26.6M debt

The High Court has upheld a bankruptcy order against Bahamas-based property investor Anthony Lyons, rejecting his challenge to the English Court’s jurisdiction in a dispute with Canadian lender Bridging Finance Inc. over a CAD $39 million debt. Mr Justice Rajah dismissed Lyons’ appeal from a July 2025 order made by Deputy ICC Judge Baister, who had made the bankruptcy order on the petition of Bridging Finance, acting by its receiver and manager PricewaterhouseCoopers Inc.

The petition debt arose from a 2018 financing connected to the Dissington Garden Village estate in Northumbria. Lyons, who was interested in taking control of the project, caused a newly incorporated English company, Dissington Lending Estate Limited, to borrow CAD $36 million from Bridging Finance (which itself was placed into receivership in Canada in April 2021) so it could acquire a senior loan over the project. Lyons, the ultimate beneficial owner of the borrower, personally guaranteed the company’s obligations under English-law facility documents.

Bridging Finance served Lyons with a statutory demand in the Bahamas in October 2022. He applied to set it aside, including on jurisdictional grounds, but later withdrew that application before a final hearing. The lender presented a bankruptcy petition in July 2024 and obtained permission to serve it out of the jurisdiction.

At the original hearing, Lyons argued that the English Court had no jurisdiction because he had emigrated from the UK in 2010 and was domiciled and resident in the Bahamas. Bridging Finance relied on section 265 of the Insolvency Act 1986, which allows a bankruptcy petition where, within the three years before presentation of the petition, the debtor carried on business in England and Wales.

The lender advanced two jurisdictional routes. It argued first that Lyons carried on business as a serial entrepreneur through a network of companies. In the alternative, it argued that he carried on business through his personal involvement in the development, letting and sale of a property known as Hamilton Terrace.

Deputy ICC Judge Baister rejected the broader “general business” argument but accepted the Hamilton Terrace basis. He found that Lyons had acquired, developed, rented and sold the property, that the project was carried on by agents for him, and that the business continued into the relevant three-year period because the property was still being rented and was ultimately sold during that time.

On appeal, Lyons argued that the judge had erred in finding that he was carrying on business. He submitted that the phrase required a subjective intention to derive profit from commercial activity and that the evidence showed he was not carrying on a business in relation to Hamilton Terrace.

Mr Justice Rajah rejected that argument. The Court accepted that carrying on business ordinarily involves commercial activity with a view to profit, but said the debtor’s subjective intention is only part of the overall circumstances and is not conclusive.

The Court found there was ample evidence on which the judge could conclude that Lyons had carried on a business by purchasing, redeveloping, renting and selling Hamilton Terrace with a view to profit. The fact that the project was a single venture did not prevent it from amounting to carrying on business for the purposes of section 265.

The Court also rejected the attempt to isolate the relevant three-year period by focusing only on the rental and sale activity during that time. The business was the property development project as a whole, which began with acquisition and redevelopment and continued until the property was sold. Because the property was rented and sold within the relevant period, Lyons was carrying on business in England and Wales during that period.

Lyons also argued that, even if jurisdiction existed, the court should have declined to make a bankruptcy order because he was a foreign debtor. That point had not been advanced before the judge below, but the High Court considered it afresh.

Applying principles used in foreign debtor cases, the Court found that Lyons had a sufficiently close connection with England and Wales, that there was a reasonable possibility of benefit from the bankruptcy order, and that at least one person interested in the distribution of assets was subject to the English Court’s jurisdiction. The Court noted that Lyons owned numerous UK companies and Luxembourg companies holding substantial UK-based assets, and that his trustee in bankruptcy believed there may be clawback claims concerning money moved from UK bank accounts after the petition was presented.

Bridging Finance also sought to uphold the bankruptcy order through a respondent’s notice based on the broader argument that Lyons carried on business through his network of companies. The High Court said the point was academic given its conclusion on the Hamilton Terrace basis, but declined to disturb the judge’s rejection of the broader argument.

The Court accepted that a shareholder or director may, in some cases, carry on a separate personal business through a corporate structure. But it found no error in the judge’s conclusion that the evidence did not sufficiently separate Lyons’ personal acts from the acts of the companies, particularly where involvement as shareholder, guarantor or de facto controller did not itself establish a separate personal business.

Read the decision here.

William Willson KC of South Square (instructed by Dentons) acted for Bridging Finance (acting by its receiver/manager PricewaterhouseCoopers Inc).

Christopher Boardman KC of Radcliffe Chambers (instructed by Kingsley Napley) acted for Anthony Lyons.