Re Gray’s Inn Construction Co Ltd
Encyclopedia
Re Gray’s Inn Construction Co Ltd [1980] 1 WLR 711 is a leading UK insolvency law
case, concerning the cessation of transactions without court approval after a winding up petition.
branch) allowed it to operate its account. It traded unprofitably. Could the transactions to the bank be voided under the Insolvency Act 1986
section 127?
section 127 (at the time, CA 1948 s 227). The court should validate transactions to ensure that unsecured creditors will not be prejudiced, applications for specific transactions have to show proof there will be no prejudice, and the more speculative a transaction is, the more unlikely it should be approved. Applications to court need not be made if there is a need for speedy action and the beneficial character of the bargain is obvious. Sales of assets for full market value raise no concern.
Buckley LJ's judgment read as follows.
Goff LJ and Sir David Cairns concurred.
UK insolvency law
United Kingdom insolvency law deals with the insolvency of firms and individuals in the United Kingdom. The important statutes are the Insolvency Act 1986, as amended by the Enterprise Act 2002, as well as the Company Director Disqualification Act 1986 and the Companies Act 2006.Insolvency is a...
case, concerning the cessation of transactions without court approval after a winding up petition.
Facts
Gray’s Inn Construction Co Ltd was a building business, which did a number of small jobs. When one of its creditors, Field-Davis Ltd presented a petition, it was ordered to be wound up by the court. Between the petition date and the court order date, its bank, Natwest (Tavistock SquareTavistock Square
Tavistock Square is a public square in Bloomsbury, in the London Borough of Camden with a fine garden.-Public art:The centre-piece of the gardens is a statue of Mahatma Gandhi, which was installed in 1968....
branch) allowed it to operate its account. It traded unprofitably. Could the transactions to the bank be voided under the Insolvency Act 1986
Insolvency Act 1986
The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.-History:...
section 127?
Judgment
Buckley LJ declined to validate most of the transactions and gave guidance on when they would or would not be void. He held that all transactions in and out of the bank account were ‘dispositions’ within the Insolvency Act 1986Insolvency Act 1986
The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.-History:...
section 127 (at the time, CA 1948 s 227). The court should validate transactions to ensure that unsecured creditors will not be prejudiced, applications for specific transactions have to show proof there will be no prejudice, and the more speculative a transaction is, the more unlikely it should be approved. Applications to court need not be made if there is a need for speedy action and the beneficial character of the bargain is obvious. Sales of assets for full market value raise no concern.
Buckley LJ's judgment read as follows.
Goff LJ and Sir David Cairns concurred.
See also
- UK insolvency lawUK insolvency lawUnited Kingdom insolvency law deals with the insolvency of firms and individuals in the United Kingdom. The important statutes are the Insolvency Act 1986, as amended by the Enterprise Act 2002, as well as the Company Director Disqualification Act 1986 and the Companies Act 2006.Insolvency is a...
- Coutts & Co v Stock [2000] 1 WLR 906
- Hollicourt (Contracts) Ltd v Bank of IrelandHollicourt (Contracts) Ltd v Bank of IrelandHollicourt Ltd v Bank of Ireland [2000] is a UK insolvency law case, concerning whether a bank should pay restitution for moneys paid out of its account after a moratorium under the Insolvency Act 1986 section 127.-Facts:...
[2000] EWCA Civ 263, [2001] Ch 555, [2001] 1 BCLC 233