Garden House Software v Marsh — awarded £2.034 million for an insolvent company’s undervalued IP transfer

Case
Garden House Software Limited v Timothy John Marsh & Ors
Court
High Court (Chancery Division) (United Kingdom)
Judge
Richard Fancourt (Queen Elizabeth II, 2018)
Date Decided
18 August 2026
Citation
[2026] EWHC 2184 (Ch)
Topics
Insolvency, Transactions at an Undervalue, Directors’ Duties, Intellectual Property

Background

Garden House Software Limited acquired the claims of Serisys Limited, which entered compulsory liquidation in March 2019. Serisys had helped develop Adypt, cloud-based financial-services software intended for banks, exchanges and brokers. On 30 August 2017, Serisys assigned all its intellectual property, including its rights in Adypt, to the newly incorporated Serisys Asset Holding Limited, another company in the same corporate group. In return, Serisys received a one-year, non-exclusive and non-assignable licence to use the software.

Garden House alleged that the assignment transferred valuable IP for consideration of no meaningful value while Serisys was insolvent. It claimed that the transaction was both at an undervalue and intended to prejudice creditors, and that directors Timothy Marsh and Timothy Rowland breached their duties. The proceedings also concerned accessory liability, later security granted over the IP to Pamela Ball, and payments of £105,790 made to Marsh in 2018.

The Court’s Holding

Fancourt J held that the 2017 assignment was a transaction at an undervalue and a transaction defrauding creditors under the Insolvency Act 1986. Marsh and Rowland were liable for breaches of duty connected with the assignment and the provision of free services to the asset-holding company. Serisys Asset Holding Limited was liable for dishonest assistance and for conspiring with Marsh and Rowland to injure Serisys and its creditors by unlawful means.

The court declined to revest the IP because the precise rights transferred had not been sufficiently identified and a vesting order risked further copyright litigation and fragmentation of Adypt. Instead, it ordered Marsh, Rowland and Serisys Asset Holding Limited to pay £2,034,000, representing the IP’s value on 30 August 2017; the overlapping remedies were non-cumulative. The award would be secured over Adypt, with Ball’s interest under a 2026 charge postponed to Garden House’s security. That charge was itself an undervalue transaction and a transaction defrauding creditors, but it did not prevent relief. Claims that the £105,790 payments were preferences or unlawful loans failed because the money probably belonged beneficially to the group holding company rather than Serisys.

Key Takeaways

  • Moving valuable intellectual property to a connected group company for a short, restricted licence can constitute a transaction at an undervalue when the transferor is insolvent.
  • A court may award the transferred asset’s full monetary value instead of revesting it where the property cannot be identified precisely and restitution would create further disputes.
  • Directors and a recipient company may face overlapping liability for breach of duty, dishonest assistance, conspiracy and statutory insolvency claims, although the claimant cannot recover more than once for the same loss.

Why It Matters

The judgment illustrates the scrutiny applied to intra-group transfers of core technology when an operating company is financially distressed. A commercially attractive group-level rationale for consolidating IP will not protect a transaction that deprives the transferor and its creditors of substantial value.

It also demonstrates the flexibility of insolvency remedies. Rather than dividing uncertain copyright interests, the court protected creditors through a monetary award secured over the combined software asset and given priority over a later insider charge.

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