Gowling WLG's finance litigation experts bring you the latest on the cases and issues affecting the lending industry.

Uncrystallised pension pot remains protected following bankruptcy

Gowling WLG's finance litigation experts bring you the latest on the cases and issues affecting the lending industry.

In the recent case of BTI 2014 LLC v Sequana SA & others [2016] EWHC 1686, the High Court has held for the first time that a dividend can be challenged as a transaction entered into at an undervalue within the meaning of section 423(1) of the Insolvency Act 1986 (the “IA”).

The Facts

The facts of the case are long and complex but for present purposes the pertinent facts are as follows.

Arjo Wiggins Appleton Limited (now Windward Prospects Limited) (“AWA”) was a wholly owned subsidiary of Sequana SA (“SSA”).

Only a month ago we were singing the praises of the CVA and calling them the saviour of the high street following the creditors’ approval of the BHS CVA. (See our earlier blog Move over Mary Portas, CVA’s are the real saviour of the High Street).

The suitability of the collective consultation regime under the Trade Union and Labour Relation (Consolidation) Act 1992 (“TULRCA”) in an insolvency scenario has always been a hot topic amongst insolvency professionals.

One of the functions of the UK Insolvency Service is to investigate directors’ conduct and if appropriate to commence directors disqualification proceedings or enter into disqualification undertakings. As the Insolvency Service has recently reviewed in its Newsletter the type of conduct which led to the longest disqualification bans in 2014/2015, now would seem like a perfect opportunity to reflect on the lessons learned from the biggest offenders.

It has been an interesting 12 months in the world of insolvency and restructuring.

The recent English High Court decision in Horton v Henry [2014] EWHC 4209 (Ch)has conflicted with the earlier decision in Raithatha v Williamson [2012] EWCA Civ. 799 and leaves the law unclear as to whether a debtor’s pension forms part of their bankruptcy estate.

A trustee in bankruptcy’s entitlement to seek an income payments order (“IPO”) in respect of a bankrupt’s income is governed by section 310 of the Insolvency Act 1986 (the “IA”). Under section 310(7) of the IA the income of a bankrupt:

Sale at an undervalue; time for presenting a petition; implied term avoids manifest injustice; complying with time limits; order for sale threshold; Wragge & Co's finance litigation experts bring you the latest on the cases and issues affecting the lending industry.

Sale at an undervalue

In Butterfield Bank (UK) Ltd v Philip and others, the bank sought summary judgment against four guarantors of a bank facility. It was alleged that the bank had sold a property at a £500,000 undervalue.

Notice of assignment

Notice of assignment can be given by either the assignee or assignor under the Consumer Credit Act 1974 (CCA).

This was the High Court's finding in Smith v 1st Credit (Finance) Ltd and another. Smith was notified by her credit card company that her credit card debt had been assigned to 1st Credit. 1st Credit wrote to Smith shortly afterwards confirming the assignment and advising how payment could be made. Smith failed to pay and was made bankrupt by 1st Credit which subsequently repossessed and sold Smith's property.