Section 423 used outside insolvency process to rebuild property venture ownership

The High Court has used section 423 of the Insolvency Act 1986 outside any formal insolvency process to unwind a series of share transfers in a property development vehicle and reconstruct the parties’ true economic interests after finding that certain transactions were designed to place assets beyond the reach of potential creditors.

The case concerned WSA Construction Ltd, a company formed to acquire and redevelop a mixed-use property in Berkhamsted. Shares in the company were originally held by Aliotta Holdings Ltd, a company associated with businessman Mario Aliotta, but were later redistributed among co-investors as litigation brought by Importers Service Corporation and ISC Europe Limited (referred to collectively as “ISC”) against Mr Aliotta in the US and the UK intensified. The litigation arises out of alleged misconduct connected to ISC’s investment dealings with Mr Aliotta and involves claims of fraud and misappropriation of funds.

In these proceedings, ISC alleged that Mr Aliotta had acted to put assets beyond ISC’s reach to hamper enforcement efforts in the event ISC is successful in the main litigation. Evidence before the Court showed that after learning ISC might pursue the shares, the parties to the share transfers attempted to retrospectively document a supposed board decision reallocating the stake in line with an earlier commercial understanding.

Justice Gleeson accepted that some of the transfers formed part of a restructuring designed to frustrate potential creditor claims. Applying section 423, he ordered those transfers unwound.

Not all the impugned dealings were reversed. The judge held that certain later transfers in 2025 involving shares routed through Mr Aliotta’s wife would have produced the same economic outcome even if the earlier transaction had never occurred, meaning no further relief was required.

The result was a judicial reconstruction of the venture’s ownership. Co-investors Thomas Sleater and Trevor Whitehead were left holding a combined 74% stake, while Mr Aliotta’s holding company retained 26%, reflecting the Court’s view of the parties’ underlying bargain.

Read the decision here.

Professionals involved:

• Peter Head of Blackstone Chambers (instructed by Simkins LLP) for Importers Service Corporation and ISC Europe Limited

• Rachel Sleeman of Five Paper (instructed by LCF Law) for Thomas Sleater, Trevor Whitehead and Oakwood Property Solutions Limited