Litigation
Lender not obliged to advise borrower about onerous term
In Finch and another v Lloyds TSB Bank Plc and others, the High Court considered whether a lender had a duty to advise a borrower about a clause in its loan agreement making it liable for the bank's hedging break costs if the borrower chose to repay a fixed rate loan early.
The UK Commercial Court has dismissed the Claimant's application for a stay under Article 28 of the Judgments Regulation.
The facts
The Commercial Court recently held that the Defendant, a former majority beneficial owner of the Claimant bank, had acted dishonestly and in breach of duties owed to the Claimant in causing the Claimant to advance monies in eight transactions which had not been repaid or recovered, to a borrower closely connected to the Defendant
Background
The Facts
On 31 July 2012, a bankruptcy order was made in respect of Mr Dean Jonathan D’Eye on the basis of a statutory demand dated 11 July 2011.
During their investigations, his trustees in bankruptcy discovered that Mr D’Eye had made a payment of £321,919 to his father on 24 January 2012 (the Payment) and, after the presentation of the bankruptcy petition on 28 May 2012, a significant portion of this money had then been used to purchase a flat (the Flat).
Key points
Lenders and proposed administrators should ensure that permission is in place where permission of prior charge holders is required for the grant of new security.
The facts
KEY POINTS
Key point
- Purely voluntary redress payments are not caught by a paragraph 99 charge
The facts
Editor’s Note: Our good London colleague Ed Marlow recently published this as a Bryan Cave client advisory.
The Court of Appeal has reiterated some important rules for funders involved in debt purchase. Banking Litigation specialist Alasdair Urwin looks at the recent case of Bibby Factors Northwest v HDF and MCD [1].
Buyer beware
This case concerned a factoring agreement, pursuant to which a funder (Bibby) purchased unpaid invoices from another company (the Assignor), including debts owing from the defendant companies (the Customers).