Digital assets may be new, but existing English insolvency laws and principles can deal with them. So finds the UK Jurisdiction Taskforce (UKJT) in its ‘Legal Statement on Digital Assets and English Insolvency Law’, published this week.

Key takeaways include:

The Inner House of the Court of Session has found that, where a business had no realistic prospect of continuing in existence, it was not appropriate to assess whether a property was sold at an undervalue by reference to a forced sale valuation.

The Court’s judgment serves as a valuable reminder of some fundamental principles of insolvency law.

The facts

Earlier today, the Court of Appeal handed down a significant judgment dealing with the adequacy of standard form after-the-event (“ATE”) insurance to defeat an application for security for costs.

In an unanimous ruling, the Court of Appeal overturned the High Court’s judgment on the defendants’ security for costs applications in Premier Motorauctions Limited (in liquidation), Premier Motorauctions Leeds Limited (in liquidation) v PricewaterhouseCoopers LLP and Lloyds Bank plc [2016] EWHC 2610 (Ch).

In an important judgment, the High Court has tackled the question of whether an impecunious claimant can defeat a defendant’s application for security for costs on the basis that it has ATE insurance in place.

The Court of Session has confirmed that the administration in Scotland of a Scottish company will take priority over an Indian liquidation of the same company, regardless of where the company’s business and assets are situated. The Court has also confirmed that the validity and enforceability outside the UK of a floating charge is irrelevant to the validity of an administrator’s appointment in Scotland under that floating charge.

The Supreme Court has held that, where a company had been the victim of wrong-doing by its directors, the directors’ wrong-doing could not be attributed to the company to prevent it (or its liquidators) from bringing claims against the directors.