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Kamis, 21 November 2013

See also: Netting and Set-off (law)

The general principle, according to the Mellish LJ in Re Jeavons, ex parte Mackay[38] is that "a person cannot make it a part of his contract that, in the event of bankruptcy, he is then to get some additional advantage which prevents the property being distributed under the bankruptcy laws." So in that case, Jeavons made a contract to give Brown & Co an armour plates patent, and in return Jeavons would get royalties. Jeavons also got a loan from Brown & Co. They agreed half the royalties would pay off the loan, but if Jeavons went insolvent, Brown & Co would not have to pay any royalties. The Court of Appeal held half the royalties would still need to be paid, because this was a special right for Brown & Co that only arose upon insolvency.
        In a case where a creditor is owed money by an insolvent company, but also the creditor itself owes a sum to the company, Forster v Wilson[39] held that the creditor may set-off the debt, and only needs to pay the difference. The creditor does not have to pay all its debts to the company, and then wait with other unsecured creditors for an unlikely repayment.
        However, this depends on the sums for set-off actually being in the creditors' possession. In British Eagle International Air Lines Ltd v Compaigne Nationale Air France,[40] a group of airlines, through the International Air Transport Association had a netting system to deal with all the expenses they incurred to one another efficiently. All paid into a common fund, and then at the end of each month, the sums were settled at once. British Eagle went insolvent and was a debtor overall to the scheme, but Air France owed it money. Air France claimed it should not have to pay British Eagle, was bound to pay into the netting scheme, and have the sums cleared there. The House of Lords said this would have the effect of evading the insolvency regime. It did not matter that the dominant purpose of the IATA scheme was for good business reasons. It was nevertheless void.
        Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Lehman Brothers Special Financing Inc observed that the general principle consists of two subrules — the anti-deprivation rule (formerly known as "fraud upon the bankruptcy law") and the pari passu rule, which are addressed to different mischiefs — and held that, in borderline cases, a commercially sensible transaction entered into in good faith should not be held to infringe the first rule.
        All these anti-avoidance rules are, however, subject to the very large exception that creditors remain able to jump up the priority queue, through the creation of a security interest.

See also: Netting and Set-off (law)
Secured lending
Main articles: UK banking law, Banking law, and Security interest
The Bank of England (est 1694) is the lender to all other banks, at an interest rate set by the Monetary Policy Committee under the Bank of England Act 1998. When lending on money to businesses at a higher interest rate, banks will contract for fixed and floating charges to decrease their risk and stabilise profits.

The priority system is reinforced by a line

Sources: Insolvency Act 1986 and Companies Act 2006

Since the Bankruptcy Act 1542 a key principle of insolvency law has been that losses are shared among creditors proportionately. Creditors who fall into the same class will share proportionally in the losses (e.g. each creditor gets 50 pence for each £1 she is owed). However, this pari passu principle only operates among creditors within the strict categories of priority set by the law:[32]

    The law permits creditors making contracts with a company before insolvency to take a security interest over a company's property. If the security is refers to some specific asset, the holder of this "fixed charge" may take the asset away free from anybody else's interest in order to satisfy the debt. If two charges are created over the same property, the charge holder with the first will have the first access.
    The Insolvency Act 1986 section 176ZA gives special priority to all the fees and expenses of the insolvency practitioner, who carries out an administration or winding up. The practitioner's expenses will include the wages due on any employment contract that the practitioner chooses to adopt.[33] But controversially, the Court of Appeal in Krasner v McMath held this would not include the statutory requirement to pay compensation for a management's failure to consult upon collective redundancies.[34]
    Even if they are not retained, employees' wages up to £800 and sums due into employees' pensions, are to be paid under section 175.
    A certain amount of money must be set aside as a "ring fenced fund" for all creditors without security under section 176A. This is set by statutory instrument as a maximum of £600,000, or 20 per cent of the remaining value, or 50 per cent of the value of anything under £10,000. All these preferential categories (for insolvency practitioners, employees, and a limited amount for unsecured creditors) come in priority to the holder of a floating charge.
    Floating charge holders come next. Like a fixed charge, a floating charge can be created by a contract with a company before insolvency. Like with a fixed charge, this is usually done in return for a loan from a bank. But unlike a fixed charge, a floating charge need not refer to a specific asset of the company. It can cover the entire business, including a fluctuating body of assets that is traded with day today, or assets that a company will receive in future. The preferential categories were created by statute to prevent secured creditors taking all assets away. This reflected the view that the power of freedom of contract should be limited to protect employees, small businesses or consumers who have unequal bargaining power.[35]
    After funds are taken away to pay all preferential groups and the holder of a floating charge, the remaining money due to unsecured creditors. In 2001 recovery rates were found to be 53% of one's debt for secured lenders, 35% for preferential creditors but only 7% for unsecured creditors on average.[36]
    Any money due for interest on debts proven in the winding up process.
    Money due to company members under a share redemption contract.
    Debts due to members who hold preferential rights.
    Ordinary shareholders, who have the right to residual assets.

Aside from pari passu or a priority scheme, historical insolvency laws used many methods for distributing losses. The Talmud (ca 200AD) envisaged that each remaining penny would be dealt out to each creditor in turn, until a creditor received all he was owed, or the money ran out. This meant the small creditors were more likely to be paid in full than large and powerful creditors.[37]

The priority system is reinforced by a line of case law, whose principle is to ensure that creditors cannot contract out of the statutory regime:

Fixed charge holders

The meaning of insolvency matters for the type of legal rule. In general terms insolvency has, since the earliest legislation, depended upon inability to pay debts.[24] The concept is embodied in the Insolvency Act 1986 section 122(1)(f) which states that a court may grant a petition for a company to be wound-up if "the company is unable to pay its debts". This general phrase is, however, given particular definitions depending on the rules for which insolvency is relevant. First, the "cash flow" test for insolvency represented under section 123(1)(e) is that a company is insolvent if "the company is unable to pay its debts as they fall due". This is the main test used for most rules. It guides a court in granting a winding-up order or appoints an administrator.[25] The cash flow test also guides a court in declaring transactions by a company to be avoided on the ground they were at an undervalue, were an unlawful preference or created a floating charge for insufficient consideration.[26] The cash flow test is said to be based on a "commercial view" of insolvency, as opposed to a rigid legalistic view. In Re Cheyne Finance plc,[27] involving a structured investment vehicle, Briggs J held that a court could take into account debts that would become payable in the near future, and perhaps further ahead, and whether paying those debts was likely. Creditors may, however, find it difficult to prove in the abstract that a company is unable to pay its debts as they fall due. Because of this, section 122(1)(a) contains a specific test for insolvency. If a company owes an undisputed debt to a creditor of more than £750, the creditor sends a written demand, but after three weeks the sum is not forthcoming, this is evidence that a company is insolvent. In Cornhill Insurance plc v Improvement Services Ltd[28] a small business was owed money, the debt undisputed, by Cornhil Insurance. The solicitors had repeatedly requested payment, but none had come. They presented a winding up petition in the Chancery Court for the company. Cornhill Insurance's solicitors rushed to get an injunction, arguing that there was no evidence at all that their multi-million business had any financial difficulties. Harman J refused to continue the injunction noting that, if the insurance company had "chosen" not to pay, a creditor was also entitled to choose to present a winding up petition when a debt is undisputed on substantial grounds.[29]

English law draws a distinction between a "debt", which is relevant for the cash flow test of insolvency under section 123(1)(e), and a "liability", which becomes relevant for the second "balance sheet" test of insolvency under section 123(2). A debt is a sum due, and its quantity is a monetary sum, easily ascertained by drawing up an account. By contrast a liability will need to be quantified, as for instance, with a claim for a breach of contract and unliquidated damages. The balance sheet test asks whether "the value of the company's assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities." This, whether total assets are less than liabilities, may also be taken into account for the purpose of the same rules as the cash flow test (a winding up order, administration, and voidable transactions). But it is also the only test used for the purpose of the wrongful trading rules, and director disqualification.[30] These rules impose potentially impose liability upon directors as a response to creditors being paid. This makes the balance sheet relevant, because if creditors are in fact all paid, the rationale for imposing liability on directors (assuming there is no fraud) drops away. Contingent and prospective liabilities refer to liability of a company that arise when an event takes place (e.g., defined as a contingency under a surety contract) or liabilities that may arise in future (e.g., probable claims by tort victims). The method for computing assets and liabilities depends on accountancy practice. These practices may legitimately vary. However, the law's general requirement is that accounting for assets and liabilities must represent a "true and fair view" of the company's finances.[31] The final approach to insolvency is found under the Employment Rights Act 1996 section 183(3), which gives employees a claim for unpaid wages from the National Insurance fund. Mainly for the purpose of certainty of an objectively observable event, for these claims to arise, a company must have entered winding up, a receiver or manager must be appointed, or a voluntary arrangement must have been approved. The main reason employees have access to the National Insurance fund is that they bear significant risk that their wages will not be paid, given their place in the statutory priority queue.
Priorities
See also: Pari passu, Seniority (financial), and Subordination (finance)

The Insolvency Act 1986 priority list

    Fixed charge holders
    Insolvency practitioner fees and expenses, s 176ZA
    Preferential creditors, ss 40, 115, 175, 386 and Sch 6
    Ring fenced fund for unsecured creditors, s 176A and SI 2003/2097
    Floating charge holders
    Unsecured creditors, s 74(2)(f)
    Interest on debts proved in winding up, s 189
    Money due to a member under a contract to redeem or repurchase shares not completed before winding up, CA 2006 s 735
    Debts due to members under s 74(2)(f)
    Repayment of residual interests to preference, and then ordinary shareholders.

Sabtu, 31 Agustus 2013

Meaning of insolvency

Companies are legal persons, created by registering a constitution and paying a fee, at Companies House. Like a natural person, a company can incur legal duties and can hold rights. During its life, a company must have a board of directors, which usually hires employees. These people represent the company, and act on its behalf. They can use and deal with property, make contracts, settle trusts, or maybe through some misfortune commission torts. A company regularly becomes indebted through all of these events. Three main kinds of debts in commerce are, first, those arising through a specific debt instrument issued on a market (e.g. a corporate bond or credit note), second, through loan credit advanced to a company on terms for repayment (e.g. a bank loan or mortgage) and, third, sale credit (e.g. when a company receives goods or services but has not yet paid for them.[16] However, the principle of separate legal personality means that in general, the company is the first "person" to have the liabilities. The agents of a company (directors and employees) are not usually liable for obligations, unless specifically assumed.[17] Most companies also have limited liability for investors. Under the Insolvency Act 1986 section 74(2)(d) this means shareholders cannot be generally sued for obligations a company creates. This principle generally holds wherever the debt arises because of a commercial contract. The House of Lords confirmed the "corporate veil" will not be "lifted" in Salomon v A Salomon & Co Ltd. Here, a bootmaker was not liable for his company's debts even though he was effectively the only person who ran the business and owned the shares.[18] In cases where a debt arises upon a tort against a non-commercial creditor, limited liability ceases to be an issue, because a duty of care can be owed regardless. This was held to be the case in Chandler v Cape plc, where a former employee of an insolvent subsidiary company successfully sued the (solvent) parent company for personal injury. When the company has no money left, and nobody else can be sued, the creditors may take over the company's management. Creditors usually appoint an insolvency practitioner to carry out an administration procedure (to rescue the company and pay creditors) or else enter liquidation (to sell off the assets and pay creditors). A moratorium takes effect to prevent any individual creditor enforcing a claim against the company. so only the insolvency practitioner, under the supervision of the court, can make distributions to creditors.

The causes of corporate failure, at least in the market segment of the economy, all begin of the creation of credit and debt.[19] Occasionally excessive debts are run up through outright embezzlement of the company's assets or fraud by the people who run the business.[20] Negligent mismanagement, which is found to breach the duty of care, is also sometimes found.[21] More frequently, companies go insolvent because of late payments. Another business on which the company relied for credit or supplies could also be in financial distress, and a string of failures could be part of a broader macroeconomic depression.[22] Periodically, insolvencies occur because technology changes which outdates lines of business. Most frequently, however, businesses are forced into insolvency simply because they are out-competed. In an economy organised around market competition, and where competition presupposes losers or contemplates excess, insolvencies necessarily happen.[23] The variety of causes for corporate failure means that the law requires different responses to the particular issues, and this is reflected in the legal meaning of insolvency.
Meaning of insolvency
See also: Insolvency and Bankruptcy
Most insurance companies and banks would be insolvent if all policy and account holders required payments all at once. Instead, the main test of insolvency is whether a company can pay its debts as they fall due.

Sabtu, 17 Agustus 2013

Companies and credit

The financial crisis of 2007, which resulted from insufficient consumer financial protection in the US, conflicts of interest in the credit rating agency industry, and defective transparency requirements in derivatives markets,[14] triggered a massive rise in corporate insolvencies. Contemporary debate, particularly in the banking sector, has shifted to prevention of insolvencies, by scrutinising excessive pay, conflicts of interest among financial services institutions, capital adequacy, and the causes of excessive risk taking. The Banking Act 2009 created a special insolvency regime for banks, called the special resolution regime, envisaging that banks will be taken over by the government in extreme circumstances.
Corporate insolvency
See also: UK bankruptcy law, Bankruptcy in the United States, and List of corporate collapses and scandals
Corporate liquidations spiked after the financial crisis of 2007-2008, after a pre-crisis norm of around 13,000 per year.

Corporate insolvencies happen because companies become excessively indebted. Under UK law, a company is a separate legal person from the people who have invested money and labour into it, and it mediates a series of interest groups.[15] Invariably the shareholders, directors and employees' liability is limited to the amount of their investment, so against commercial creditors they can lose no more than the money they paid for shares, or their jobs. Insolvencies become intrinsically possible whenever a relationship of credit and debt is created, as frequently happens through contracts or other obligations. In the section of an economy where competitive markets operate, wherever excesses are possible, insolvencies are likely to happen. The meaning of insolvency is simply an inability to repay debts, although the law isolates two main further meanings. First, for a court to order a company be wound up (and its assets sold off) or for an administrator to be appointed (to try to turn the business around), or for avoiding various transactions, the cash flow test is usually applied: a company must be unable to pay its debts as they fall due. Second, for the purpose of suing directors to compensate creditors, or for directors to be disqualified, a company must be shown to have fewer overall assets than liabilities on its balance sheet. If debts cannot be paid back to everybody in full, creditors necessarily stand in competition with one another for a share of the remaining assets. For this reason, a statutory system of priorities fixes the order among different kinds of creditor for payment.
Companies and credit
Main articles: UK company law, English contract law, English property law, and UK commercial law
The credit ratings industry is dominated by Fitch, Moody's and S&P, with London headquarters in Canary Wharf. Companies pay the rating agencies to rate them, because this provides access to cheaper loans.

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Rabu, 01 Mei 2013

Discount Camaflexi C423_WH Panel Low Loft Bed

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Selasa, 30 April 2013

Low price Camaflexi C402_CP Arch Spindle Low Loft Bed

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Senin, 29 April 2013

Price compare Donco Kids Twin Tent Loft Bed with Slide 750T Finish: White, Color: Red Polka Dot

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Donco Kids Features: -Twin size. -Solid pine wood construction with integrated ladder. -Comes with slide and slat-kits .


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Minggu, 28 April 2013

Price compare Camaflexi C422_CP Panel Low Loft Bed

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Sabtu, 27 April 2013

Buy online Camaflexi C413_WH Mission Low Loft Bed

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Finish:White, Size:Twin Mission Low Loft Bed Loft beds are an intelligent solution for limited spaces because they free up so much floor space for play, study or extra storage.


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Jumat, 26 April 2013

How do I get Bolton Bennington Twin Low Loft Tent Bed with Built-In Ladder 9851Y00LT1BY / 9851Y00LT2BY

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Bolton Furniture Features: -Children's loft bed with bottom curtain in blue/yellow. -Solid wood and veneers. -Bed comes complete with slat roll. -No additional support necessary.


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Kamis, 25 April 2013

Get cheap Venetian Worldwide Alexa Twin Loft Bed w/ Workstation.

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Rabu, 24 April 2013

Product Review for Donco Kids Full Bunk Bed with Attached Ladder 123-3CP/123-3E Finish: Light Espresso

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Selasa, 23 April 2013

Compare Bolton Windsor Twin Low Loft Tent Bed with Built-In Ladder 9841500LT1LW / 9841500LT2LW Configuration: Low Loft Bed with Bottom Curtain

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Senin, 22 April 2013

Get cheap Bolton Bennington Twin Low Loft Tent Bed with Top Tent and Built-In Ladder 9851200MRLT3BW / 9851200MRLT4BW Configuration: Low Loft Bed with Tent and Slide

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Bolton Furniture Features: -Children's loft bed with top tent and curtain in Blue / White. -Solid wood and veneers. -Bed comes complete with slat roll.


Reviews bunk bed ladders
  • Bed Type : Loft BedsBed Frames
  • Mattress Type : Twin
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Bolton - Bennington Low Loft w/ Blue & White Curtain, Top Tent, Slide, Natural/Rosewood Playtime and dream time come together in the Bennington Premier Low Loft Tent Bed.,Explore our large selection of top rated products at low prices from Bolton Furniture, Slide, Atlantic, Atlantic Furniture, and South Shore,Shop Bennington Twin Low Loft Tent Bed with Top Tent and Built-In Ladder at Wayfair. Free and Fast Shipping at everyday low prices. Choose from tons of styles, colors ,Find great deals on Twin low tent Home & Garden, including discounts on the Bolton Furniture Cottage Twin Low Loft Tent Bed with Tent and Built-In Ladder 9811500LT5PW ,Low-Loft. Unique Loft Systems from Bolton Where Children Can Play, Explore, Sleep and Dream! At Bolton Furniture we understand that Low Loft Storage and Tent beds , Configuration: with Tent and Slide, Bolton Twin Low Loft Tent Bed with Built-In Ladder Bennington Twin Low Loft Tent Bed with Top Tent ,Bolton Furniture-Bennington Twin Low Loft Tent Bed with Top Tent and Built-In Ladder - Configuration: Low Loft Bed with Tent-9851200MRLT3BW-JON1084 ,bolton furniture bolton furniture bennington twin low loft tent bed with top tent and built in ladder 9851200mrlt3bw,Bolton Furniture-Bennington Twin Low Loft Tent Bed with Top Tent and Built-In Ladder - Configuration: Low Loft Bed with Tent and Slide-9851200MRLT4BW-JON1084 ,9851200MRLT3BW Configuration: Low Loft Bed with Tent Features: -children's loft bed with top tent and curtain in Blue / White.-Solid wood and veneers.-Bed comes

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