A copy of the judgment can be found here.
Introduction
1. The bank successfully appealed an order refusing to give or reserve judgment after hearing full submissions in the bank’s petition and instead listing the petition for hearing at the same time as two later-in-time petitions to bankrupt the debtor.
The Background
A year after its collapse, Carillion's insolvency continues to haunt both its supply chain and the wider UK construction industry. Many of those left unpaid had spent months chasing Carillion for payment, all the while staving off payment demands from others. Overnight, their debts became unsecured. The flow of cash from Carillion that would have paid its supply chain dried up. A cascade of consequential insolvencies was inevitable.
Events of Default are most often found in the context of loan agreements and are similar to termination rights that may be found in commercial agreements, albeit with potentially different consequences. An Event of Default is an event or circumstance relating to a borrower or its activities which will give rise to a right for a lender to refuse to make any further advances, demand immediate repayment of a loan, make a term loan repayable on demand and/or enforce its security.
Introduction
For more than a century, a creditor holding English law governed debt relied on the principle (known as the “rule in Gibbs ”) that a debt governed by English law cannot be discharged by a foreign insolvency proceeding, provided that the creditor does not submit to that proceeding.
Using a traffic light approach, we consider the sorts of amendments which might impact on "day one" security.
WHEN MIGHT AMENDMENTS PRESENT A PROBLEM?
Freezing Injunctions
Creditor not obliged to take steps in foreign proceedings to preserve security
We are yet to see the true impact of Christmas trading in the retail industry although HMV is already a victim of the tough conditions for retailers. Additionally, Boots has announced a fall in sales and the launch of a “transformational costs management program” to save more than $1 billion and Next has confirmed that profits in store have fallen and although online sales are up, the uncertainty about the UK economy after Brexit makes forecasting difficult. Only one thing is clear – consumers remain at risk in the event of a retail business entering administration.
A trustee in bankruptcy lost all rights to the proceeds of sale of a freehold property after he disclaimed title to it
Background
Mr Sleight was the trustee in bankruptcy of an insolvent estate. The deceased’s assets included several freehold properties that were charged to banks where the value of the property was less than the amounts due under the charges. Given the negative equity, the trustee in bankruptcy disclaimed title to these properties as they constituted “onerous property”.
The Facts
The application relates to the estate of Jillian Mascall (the “Deceased”), which owned around 27 properties. The Deceased died on 4 December 2014 and it later became apparent the estate was insolvent.