Consideration, Characterisation, Evaluation: Transactions at an Undervalue After Phillips v Brewin
World Bank Global Initiative on insolvency and Creditor/Debtor Regimes; University College London (UCL) - Faculty of Laws; Chambers of Michael Crystal QC
Look Chan Ho
Freshfields Bruckhaus Deringer LLP; The World Bank
This paper takes the opportunity presented by the House of Lords' decision in Phillips v Brewin to examine the law governing the reversal of transactions at an undervalue entered into by a company which then becomes insolvent. The paper discusses the sequence in which issues related to ascertaining whether a transaction had been at an undervalue are to be approached, the proposition that contracts somehow "linked" with each other can be taken together as constituting a single "transaction" , and the prior question about when such contracts should be considered "linked" in the first place. Finally, the paper detects something of a tendency in the case law to use the notion of a transaction at an undervalue to brush aside inconveniences arising from the peculiarities in the way certain cases have been pleaded. Notably, it suggests that Phillips v Brewin might not have involved any transaction at an undervalue at all.
This is a somewhat updated version of the published article.
Number of Pages in PDF File: 15
Keywords: English law, corporate insolvency, bankruptcy, fraudulent preference law
JEL Classification: K19, K22, K49working papers series
Date posted: April 1, 2002
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