Self-application

Basic principle

Insolvency Law

The German Federal government is preparing measures to suspend the requirement for companies to file for insolvency in cases where companies are suffering financial losses due to the current COVID-19 crisis. This suspension may apply through 30 September 2020. The German government aims to avoid insolvencies that may occur simply because the state's financial help may not arrive in time.

The UK Supreme Court has held that the extinction of a company's beneficial interest under a trust on the transfer of an asset by the trustee to a bona fide purchaser without notice does not constitute a "disposition" under section 127 of the English Insolvency Act 1986 (the "Act").

The Supreme Court has held that a principal was entitled to recover payments collected by its agent on its behalf following the agent's insolvency: Bailey and another (Respondents) v Angove's PTY Limited (Appellant) [2016] UKSC 47.

INTRODUCTION

The use of trusts for asset protection purposes is well established and – in principle – not improper. However, recent history has seen increasing attempts by creditors to have transfers of assets unwound. A recent UK Supreme Court case saw the Court effectively achieve this by way of a resulting trust finding.1 This article considers the issue from a different angle: insolvency legislation.