The court considered the extent of the so-called anti-deprivation rule which would avoid a contract designed to deprive creditors of an asset on the insolvency of a party to the contract. The claimant appealed a finding that the rule did not apply to synthetic collateralised debt obligations.
Held: A transaction completed before the insolvency act need not be caught. The particular contractual arrangements here did not fall within the anti-deprivation rule, and the provisions were valid. The Collateral was acquired with money provided by the Noteholders and that the change in priorities was included to ensure that the Noteholders were repaid out of those assets.
Judges:
Lord Neuberger of Abbotsbury, Master of the Rolls, Lord Justice Longmore and Lord Justice Patten
Citations:
[2009] EWCA Civ 1160, Times 16-Nov-2009, [2010] BCC 59, [2010] 3 WLR 87, [2010] 1 BCLC 747, [2010] Bus LR 632, [2010] BPIR 174, [2010] Ch 347
Links:
Jurisdiction:
England and Wales
Citing:
Cited – Ex parte Jay, in re Harrison CA 26-Feb-1880
A builder agreed with the owner of the land on which he was to build houses that upon his bankruptcy all the building materials on the land should become absolutely forfeited to the owner. The builder than charged the materials, but this was not . .
Appeal from – Perpetual Trustee Co Ltd v BNY Corporate Trustee Services Ltd and Another ChD 28-Jul-2009
The parties had entered into complicated financial arrangements effectively providing credit insurance. On the insolvency of Lehman brothers, a claim was made.
Held: The contractual provisions were effective as a matter of English law and, in . .
Cited by:
Appeal From – Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Another SC 27-Jul-2011
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld . .
See Also – Perpetual Trustee Company Ltd v BNY Corporate Trustee Services Ltd and Another ChD 17-Nov-2009
. .
Lists of cited by and citing cases may be incomplete.
Contract, Banking, Insolvency
Updated: 17 September 2022; Ref: scu.377779
