No allowance is made in an insolvency for exchange rate fluctuations which affect the sterling value of a debt in foreign currency after the date of the winding up order. The purpose of the rule that debts are valued at the date of winding up is to give effect to the principle of pari passu distribution. It is a principle of fairness between creditors: ‘It is only in this way that a rateable, or pari passu, distribution of the available property can be achieved, and it is, as I see it, axiomatic that the claims of creditors amongst whom the division is to be effected must all be crystallised at the same date . . for otherwise one is not comparing like with like . .’
Judges:
Oliver J
Citations:
[1976] 1 WLR 757
Cited by:
Cited – In re Telewest Communications Plc ChD 26-Apr-2004
A scheme of arrangement had been proposed. The creditor complained that in providing for payment in a currency other than that agreed, it had been prejudiced.
Held: The provision in the scheme did purport to alter the claimant’s rights. . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 30 April 2022; Ref: scu.197912
