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

Abstract

This article argues that in Perpetual Trustee Company v. BNY Corporate Trustee Services; Butters v BBC Worldwide [2009] 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

Ho, Look Chan, The Principle against Divestiture and the Pari Passu Fallacy (January 23, 2010). Butterworths Journal of International Banking and Financial Law, Vol. 25, No. 1, p. 3, 2010, Available at SSRN: https://ssrn.com/abstract=1541203

Look Chan Ho (Contact Author)

Des Voeux Chambers ( email )

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