The Government has fed back on the responses to DBIS’s consultation on the effect of bankruptcy on the ability to access a basic bank account. Responses to the consultation have shown that only 27% of people subject to a bankruptcy order are able to retain their bank account. A bank's decision not to offer a bank account to a bankrupt is mainly based on the bankrupt's credit record, rather than on the risk of the trustee making a claim against the bank, a risk that the consultation process has shown is more perceived than real.

ICMA’s European Repo Council has responded to the Commission's consultation on CSDs. Its main concerns focus on:

The Commission has agreed a plan to split Northern Rock into two banks, a “good” and a “bad” one. The “good” bank will carry on the economic activities of Northern Rock and the “bad” one will be an asset management company that will run down the remaining business. The Commission found the UK Government had kept state aid to a minimum in planning the restructuring. Treasury is pleased with the approval, which it says will allow Northern Rock to return to the mortgage markets while the back book of mortgages is managed separately.

In October 2016, the Chamber for Commercial Disputes at the Supreme Court of the Russian Federation considered the cassation appeal of Eurasian Trading Company LLC (hereinafter – the Trading Company) in Case № А57-16992/2015 against the court’s refusal to introduce monitoring procedures with respect to RBP JSC (hereinafter – the Debtor) and decision to dismiss the application by the Trading Company without consideration.

The Illinois legislature has passed and sent to the Governor an amendment to the Illinois Conveyances Act to address the decision in Crane v. The Gifford State Bank (2012 WL 669595 (Bkrtcy.C.D. Il). The Crane decision was rendered on February 29, 2012, and held that a mortgage could be avoided by a trustee in bankruptcy because it failed to include the interest rate and maturity date of the indebtedness secured by the mortgage.

Where lenders rely on floating charge security to make recoveries from companies in administration, some recent cases have massively increased the potential for administration expenses to swallow up those recoveries. The more well-known cases could just be the start. So, what are the potential risks? What can lenders do in the face of the law as it currently stands? What is going to happen next?

The Nortel decisions

OFT is monitoring the lending and broking of secured loans to consumers where the loan's purpose is to annul a recent bankruptcy. It is asking for comments by 30 October from any consumers who have taken this type of loan.

In Body Corporate 341188 v Kelly, a judgment debtor sought to overturn an Associate Judge's decision not to set aside a bankruptcy notice.  The notice was in respect of a District Court judgment and a costs order obtained by the Body Corporate in a separate High Court proceeding.  The debtor argued (among other grounds) that the notice was invalid because it was in respect of two judgment debts rather than one.

In Fenland District Council v Sheppard and others, FDC had spent £72,000 making a derelict property safe, which by the hearing date was worth less than half that amount. FDC registered the property improvements as an interest in the property, (indisputably) in priority to the prior mortgagee.

When the property's owner was adjudicated bankrupt, the bankrupt's trustee disclaimed the property (under a provision similar to section 117 of the NZ Insolvency Act). FDC sought to have the property vested in it, on the condition that the mortgagee's charge be removed.

In this English case, a secured lender (Nationwide) appointed administrators to three companies. However, before appointing, Nationwide had: