The High Court has recently struck out proceedings against a defaulting debtor where the bank made a unilateral commercial decision to delay to allow her co-debtor to recover financially so increasing its prospect of recovery.
Background
In Bank of Ireland v Wilson,1 the bank commenced summary proceedings against the defaulting debtors in 2012. The debtors, who were jointly and severally liable on the debt, had been in a relationship but were now estranged.
In a recent decision by the influential Third Circuit Court of Appeals, In re KB Toys Inc., 2013 U.S. App. LEXIS 23083 at *17 (3d Cir. Nov. 15, 2013), the Court decided that “the cloud on the claim” stemming from a preferential payment made to the original claimant continues with the claim, which then could be disallowed.