The Supreme Court gave judgment earlier today in Brown v Stonegale Limited [2016] UKSC 30, on appeal from [2015] CSIH 12. A summary of the decision is available here (pdf).
The case concerned the disposition of five properties by a company. The first property was sold for £2.4million, the proceeds being transferred to a bank to reduce the company's borrowing. The remaining four properties were then transferred to others for no consideration. Lord Reed held that there was no reciprocity between the transfer of these four properties and the earlier payment to the bank: the purpose of the later transfer was to divert assets away from the creditors, exactly what section 242 ("Gratuitous alienations (Scotland)") of the Insolvency Act 1986 was designed to prevent.
A recording of Lord Reed, delivering a summary of the court's decision, is available below:
Wednesday, 22 June 2016
UK: Supreme Court rules that property transfers were gratuitous alienations under section 242 of the Insolvency Act 1986
The Supreme Court gave judgment earlier today in Brown v Stonegale Limited [2016] UKSC 30, on appeal from [2015] CSIH 12. A summary of the decision is available here (pdf).
The case concerned the disposition of five properties by a company. The first property was sold for £2.4million, the proceeds being transferred to a bank to reduce the company's borrowing. The remaining four properties were then transferred to others for no consideration. Lord Reed held that there was no reciprocity between the transfer of these four properties and the earlier payment to the bank: the purpose of the later transfer was to divert assets away from the creditors, exactly what section 242 ("Gratuitous alienations (Scotland)") of the Insolvency Act 1986 was designed to prevent.
A recording of Lord Reed, delivering a summary of the court's decision, is available below:
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