Caroline Benfield Archive

Be aware of void property transactions if seller is insolvent

There is always the risk with any property transaction that the seller could be selling at an under value because they are in financial difficulties and need a quick sale. If a pending winding up or bankruptcy petition is presented against the seller before the sale has completed, and which later results in a winding up or bankruptcy order, then the sale will be void – a fact the buyers are unlikely to know.

What should a court order say where a statutory demand is set aside?

The case of Clarke v Cognita Schools Limited [2015] highlights the complicated relationship between the Civil Procedure Rules (CPR) and the Insolvency Rules. This particular case concerned a decision about whether or not a debtor, applying to have an application for a statutory demand dismissed, is entitled to receive a statement, in the Order that they have the right to have the order set aside, varied or stayed. In this particular case, the debtors were not correct to have applied the CPR when deciding their grounds for challenging the bankruptcy order made against them.

Personal insolvency numbers on the decline

The latest statistics released by the Insolvency Service show that personal insolvencies in 2014 fell to their lowest since 2005. HMRC, Local Authority and Debt Purchasers Bankruptcy Petitions have all decreased by around 20% in 2014 and we expect to see this trend continue throughout 2015, not least because the Government is planning to raise the minimum amount of debt for which individuals are forced into bankruptcy from £750 to £5,000 from October 2015.

Recovery of success fees and insurance premiums no longer possible after April 2015

Conditional Fee Agreements (CFA) success fees and After The Event (ATE) insurance premiums will no longer be recoverable in proceedings brought by liquidators, administrators, trustees in bankruptcy, or companies in liquidation or administration. This means that defendants will no longer be liable for success fees and ATE premiums in claims

Bankruptcy: who pays Trustee’s costs on annulment?

A case that came before the High Court in 2013 has highlighted the discretion of the court to decide whether, and if so by whom, the Trustee’s costs, arising from a bankruptcy order which was subsequently annulled, should be paid. Dr and Mrs Oraki were declared bankrupt after a refusal to pay the legal fees of their solicitor who, they alleged, was guilty of misconduct. On appeal, their bankruptcy orders were annulled. However, the matter was not over: the couple then appealed against the order to pay the costs (which were considerable) accrued by the Trustee in Bankruptcy and then to reclaim the sum from their solicitor’s firm.

Pension of a bankrupt: appeal vacated

The appeal of the decision in Raithatha - v - Williamson [2012] has been vacated following settlement. The outcome of the first instance decision was that an Income Payments Order (“IPO”) could be made in respect of the undrawn personal pension. This decision therefore stands as precedent.
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