Insolvency

Question 1

Stewart v Jarvie

Answer 1

• arrestment ranked pari passu with sequestration
• sequestration equivalent to an arrestment by all creditors claiming against the estate
• arrester only entitled to the expenses conferred by the diligence

Question 2

Macfadyens

Answer 2

“adequate consideration”

• “consideration” in the context of bankruptcy law meant something of material or patrimonial value which could be vindicated by legal process
• patrimonial worth at time given

Question 3

Short’s Trustee v Chung no.1

Answer 3

• 2 flats sold below market value. Given as gift
• alienation of property
• inner house > primary approach is for property to be restored to estate as far as possible
• HOL > seeking to reduce to revert ownership not sufficient, rectfication of register requried

Question 4

Short’s Trustee v Chung no.2

Answer 4

• res judicata? No, could litigate again

- Mrs C had to execute and deliver disposition of properties to trustee

Question 5

Mechanism for restoring heritable property under gratuitous alienation?

Answer 5

• execution and delivery of disposition

- Short’s Trustee v Chung

Question 6

Grampian MacLennan’s Distribution Services Ltd v Carnbroe Estates Ltd

Answer 6

• sale of property fell below market value, was adequate consideration under circumstances
• G perilous financial position
• actual sale fell below price so this was challengeable by liquidators

REVERSED in 2018

• property selling must be able to continue after sale/security
• otherwise not valuable consideration
• disposition of defenders reduced

Question 7

Whatmough’s Trustee v British Linen Bank

Answer 7

Unfair preferences.

• cheque payment of overdrawn bank account, not challengeable
• payments are cash are non-challengeable

Question 8

Nordic Travel Ltd v Scotprint Ltd

Answer 8

“collusion”

• printing of travel brochures
• debt paid without paying other creditors
• Held to be in ordinary course of business
• collusion is more than knowledge of debtors insolvency > participation

Question 9

Burnetts Trustee v Grainger

Answer 9

Sequestration - vesting rules.

• race to register, trustee in sequestration registered own interest
• prior to B recieving registerable disposition but had entered possession
• went into sequestration in meantime
• ownership passed to trustee in sequestration

Question 10

Manley Petitioner

Answer 10

• recievers powers have priority over liquidator