UK: Scotland: loans to football club were not repayable on demand

Lord Tyre, sitting in the Court of Session (Outer Court), gave judgment earlier this month in Nixon v Livingston Football Club Ltd [2015] CSOH 43. At issue was whether money loaned by a director (and companies under his control) to the Livingston Football Club was repayable on demand. The judge held, on the evidence before him, that the loans were not repayable on demand but only when the company could afford to repay them. In doing so he noted that "... the concept of making a loan on the basis that it is not repayable unless and until the borrower can afford to repay, which might be regarded in certain contexts as uncommercial and therefore improbable, seems to me to be much less improbable where the borrower is a company operating a football club" (para. [26]).

UK: auditor clauses in debt contracts

The Competition Commission, as part of its statutory audit services market investigation, has published a report it commissioned regarding auditor clauses in debt contracts: see here (pdf). The authors report on research from the US and UK with regard to the use of clauses in loan agreements regarding the identity of the borrower's auditor and highlight questions for further investigation. One such question, with regard to the UK, concerns the reasons for the absence of auditor clauses in many contracts: is this explained by the expectation that large listed firms would already have one of the large audit firms?