The Principle against Divestiture and the Pari Passu Fallacy
Butterworths Journal of International Banking and Financial Law, Vol. 25, No. 1, p. 3, 2010
17 Pages Posted: 25 Jan 2010
Date Written: January 23, 2010
This article argues that in Perpetual Trustee Company v. BNY Corporate Trustee Services; Butters v BBC Worldwide  EWCA Civ 1160, the Court of Appeal’s conflation of the principle against divestiture with the pari passu principle is woven with the same fibres used to form the fabric in The Emperor’s New Clothes - an illusion. The Court of Appeal also overruled Fraser v. Oystertec in error. In terms of actual outcome, Perpetual is correct; but the actual outcome in Butters is most suspect and exalts form over substance.
Keywords: anti-deprivation principle, insolvency policy, pari passu principle
JEL Classification: K10,K11, K12, K19, K20, K29, K30, K39, K40, K49
Suggested Citation: Suggested Citation