UK Supreme Court clarifies the “balance-sheet” insolvency test

BNY Corporate Trustee Services Limited v Eurosail-UK 2007-3BL PLC [2013] UKSC 28 The Supreme Court has delivered a judgment providing welcome clarification on the construction and effect of section 123(2) of the Insolvency Act 1986 (the “balance-sheet” insolvency test) and its interaction with section 123(1)(e) of the Act (the “cash flow” insolvency test).The decision is relevant not just to creditors presenting winding-up petitions in respect of insolvent debtors but also to the wider banking industry, … Read more

Business common sense arguments fail to save unclear drafting: the Court of Appeal (UK) upholds High Court decision on loan repayment fees

BMA Special Opportunity Hub Fund Ltd & Ors v African Minerals Finance Ltd [2013] EWCA Civ 416 (read the judgment here) The Court of Appeal has upheld a High Court decision construing a finance agreement such that a borrower’s prepayment of a loan facility following a voluntary refinancing with another lender did not trigger a prepayment fee … Read more

Clearing brokers’ duties when exercising close out powers

In the current economic climate, brokers will find the decision of the High Court (UK) in Euroption of considerable interest, since it considers the duties of a broker which is conducting a close-out and liquidating the position of a client who is in a state of default. Euroption Strategic Fund Limited v Skandinaviska Enskilda Banken AB [2012] EWHC 584 … Read more