The Court of Appeal has overturned a High Court ruling from 2015 that a former director of a car dealership was personally liable to a customer who paid the company for three vehicles in the weeks prior to the company's liquidation where the cars were ultimately not delivered to the customer due to the company's liquidation.

Background

When someone is made bankrupt, their interest in the family home vests automatically in their Trustee in Bankruptcy, upon his or her appointment. The Trustee has 3 years from the date of the bankruptcy order to realise this interest. The Trustee will first of all ask if a third party is willing and able to purchase the Trustee’s share, usually 50% of the available equity. If that is not possible, then the Trustee will request that the property is put on the market for sale. As a last resort, the Trustee can apply to the Court for an order for possession and sale of the property.

Under the insolvency legislation, any dispositions of property or payments made by a company after it has been presented with a winding up petition are void, unless validated by the Court.

A declaration sought by the Liquidator of an insolvent company that certain payments made to a director constituted fraudulent preference has been refused by the High Court in FF Couriers Limited & Companies Acts: Keane -v- Day & ors [2016] IEHC

We are currently still in a lot of unknown territory; so how will our exit from the EU affect Debts here in the UK, in Europe and in other countries?

Once the UK finalises the exit from the EU, any debts someone may have in the EU will fall into the category of similar non-EU debts in other countries, such as the United States. Whilst you can include those debts in a UK bankruptcy you are only afforded the protection from them in the UK. 

What can happen to you if your pre-payment is lost is demonstrated by the recent administration of budget tour operator Lowcostholidays. The company’s administration left customers already abroad at risk of being asked by hotel owners to settle their bills before leaving and meant that other customers lost deposits paid for holidays which will now, sadly, not take place.

Prior to 1930 if an insured person/company (insured) incurred a liability to a third party (TP) but then became bankrupt/passed into liquidation any monies paid out under the insurance policy was paid to the Trustee/Liquidator for the benefit of ALL creditors.

The Third Parties (Rights Against Insurers) Act 1930 (1930 Act) transferred the insured’s rights against the insurer under certain circumstances to the TP who could pursue the insurer against the policy proceeds once the insured’s liability was established. So the policy proceeds may benefit the TP and not all creditors.

Welcome to the third article in this amazing series which looks at what you can do to try to extract money from a stubborn business debtor.

A recent decision of the Court of Appeal has seemingly halted a trend towards leniency in the High Court in applications for the restriction and disqualification of directors of insolvent companies, particularly where the company has been struck off the register of companies for failing to file annual returns.

Welcome to the second article in this amazing series which looks at what you can do to try to extract money from a stubborn business debtor.

In the first article I looked at the potential benefits and detriments of issuing a County Court Claim.  This time I will take a step back and look at what you could do prior to going to Court with your completed forms and a large cheque for the ever-growing Court fee. You can read this article here.