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A £3m gift, a diamond and a castle; the story of a successful section 423 claim (Thomas v Jones)

Published on: 30 April 2025
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Article summary

Restructuring & Insolvency analysis: In this case, trustees in bankruptcy successfully obtained judgment under section 423 of the Insolvency Act 1986 (IA 1986) against a bankrupt’s former business partner and his son. The court held that John Jones had gifted £3m to his son, Adam Jones, (the gift) with the purpose of keeping the money out of the hands of Mr Hamilton, to whom John Jones owes over £2m following previous litigation in April 2019. The gift was accepted by all parties to be a transaction at undervalue and the main focus of the trial was on John Jones’ purpose in giving the gift. The defendants relied on a deed of gift and John Jones’ financial capacity to satisfy any judgment as evidence negating any IA 1986, s 423 purpose. The judgment also sets out the applicable law on IA 1986, s 423 cases, as distilled in Ethos Solutions Ltd; Purkiss...

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