Harper Macleod Partner James Lloyd, who represented the successful party, reflects on the implications for insolvency practitioners of the decision in Carnbroe.
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The Supreme Court judgment in MacDonald and another v Carnbroe Estates Ltd has reframed the remedies available to the court when there has been a transfer at undervalue. Harper Macleod LLP represented the joint liquidators in this action, successfully arguing that the transaction should be reduced as a transfer at undervalue.
A gratuitous alienation is a transfer of property from a debtor to another party for no consideration or an inadequate consideration. A recent Supreme Court ruling found that a series of conveyances of properties some nine months before the sellers went into administration was an attempt to divert assets away from creditors.
Recently, the English High Court found that although the directors of a company which had entered administration had continued trading wrongfully, their actions did not increase the net deficiency of the Company. As a result the directors would not be personally liable to contribute to the Company’s assets for distribution to creditors.
The Bankruptcy & Debt Advice (Scotland) Act 2014 came into force today on 1 April 2015, introducing, in the Scottish Government's own words, "one of the most modern systems of debt advice and debt management in the world."