Mairi Innes acted for the successful applicants in setting aside the IVA of Mr Reza Merchant, whose liabilities totalled approximately £52.7 million, pursuant to a High Court judgment handed down on 16 April 2026. The IVA was revoked on the grounds of material irregularity under section 262 of the Insolvency Act 1986.
The Court found that Mr Merchant and his nominee had concealed collateral side agreements which conferred preferential treatment on certain creditors, and that the nominee had failed to discharge his duties with the requisite competence and independence. The nominee was also criticised for failing properly to interrogate the “flimsy” business plan underpinning the proposal, which had promised a 100p/£ return within five years.
The IVA arose from the collapse of Mr Merchant’s co-living business, The Collective, formerly the world’s largest co-living developer. The judgment provides a clear reminder of the importance of transparency on the part of debtors, and independence and professional rigour on the part of insolvency practitioners, in the IVA regime.
The full judgment can be found below
