The Scottish Court of Session considers the interaction of Indian insolvency proceedings for three Scottish Companies that had also been placed into Administration in Scotland.
Background
The Victoria Jute Company Limited ("Victoria"), The Samnuggur Jute Factory Limited ("Samnuggur") and Titaghur plc ("Titaghur") were all incorporated in Scotland, but had been carrying out their business in India.
It is perhaps not as well-known as it should be that the Bankruptcy (Scotland) Act 2016 sections 195 – 198 provides a six-week moratorium – effectively a postponement or period of protection from action to recover debts - to individuals, partnerships and trusts facing financial distress or liquidity issues.
The moratorium provides breathing space to allow parties to be protected from their creditors while they take advice and consider what debt relief options might be available to them.
A party can normally apply for the moratorium once in any 12-month period.
On 4 December 2019, the UK Supreme Court issued its decision in MacDonald and another as joint liquidators of Grampian MacLennan's Distribution Services Ltd v. Carnbroe Estates Ltd [2019] UKSC 57, a Scottish case involving insolvency and "gratuitous alienations" (sales at undervalue).
Back in the late 1990’s the ubiquitous Katie Price t/a Jordan was at the height of her fame, gracing the pages of our tabloids, gentlemen’s publications such as Loaded and FHM and perhaps the odd bedroom wall of a rather poor Law student. It was reported at the time she had a net worth of around £45million.
In December 2018 with her finances now somewhat diminished, Katie entered into an Individual Voluntary Arrangement (“IVA”) with her creditors. In November this year she was made bankrupt for failing to comply with the same.
Against the backdrop of the insolvency of Scottish companies carrying on business in India, a recent decision of the Inner House of the Court of Session has considered the competency of seeking declaratory orders in petition procedure.
Background
In October 2016, we reported on a Court of Session decision which concerned three Scottish registered companies carrying on business in India and which had been placed into administration under the Insolvency Act 1986.
Outer House case considering a motion for recall of inhibitions served on Cordelt Limited and Mako Property Limited by Playfair Limited. Mako and Cordelt argued that the inhibitions prevented them showing clear searches to purchasers in implement of a contract to sell properties in Edinburgh.
The Bankruptcy Fees etc (Scotland) Regulations 2012 recently implemented some significant changes to the Accountant in Bankruptcy (AiB)’s fees structure. Key changes include:
The Scottish Government launched a consultation on the question of the reform of Scotland’s bankruptcy law earlier this year, and a lengthy and detailed consultation paper was released. Those of us who have heard the Accountant in Bankruptcy speak at conferences and the like over recent months eagerly awaited a discussion document which would reflect her guarded admission that things had perhaps swung rather too far in favour of debtors, and the time was right to try to redress that balance by looking towards the impact of debt on creditors.
The Issue
The recent flurry of news reports regarding the administration of high street retail chains and the subsequent sale of parts of their businesses is perhaps an opportune time to flag up the renewed importance that the hypothec plays in Scottish property law.
By virtue of the hypothec, in insolvency, a landlord automatically obtains a fixed charge ranking on the proceeds of sale of the moveable goods of the tenant that are on the premises as at the point of insolvency, up to the value of any arrears of rent.