Assignment of Debt in UK Law

Leading Cases
  • CFL Finance Ltd v David Rubin and Others
    • Chancery Division
    • 27 Enero 2017

    "Assigned Assets" was defined to mean all of Kaupthing's rights and benefits under or in respect of the Facility Agreement and the Guarantees, save that Kaupthing's security rights were expressly excluded. (Clause 3 of the KSA itself made provision in respect of the enforcement of Kaupthing's security.) "Obligations" was defined to mean all of Kaupthing's obligations "(if any)" under or in respect of the Assigned Assets.

    As at the date of the creditors' meeting, Kaupthing was not entitled to sue upon or enforce a debt owed by Crosslet Vale under the Facility Agreement or a debt owed by Mr Gertner under his guarantee. Its former entitlement in that regard had been replaced by an entitlement to enforce the terms of the KSA. For reasons already set out, neither clause 2.1 nor clauses 6.2 and 7 of the KSA assist Mr Gertner.

    Alternatively, even if (contrary to my view) the claims could be said to have some kind of continuing existence, Kaupthing's inability to enforce those claims meant that it could not be considered a creditor in respect of them. The position would be analogous in that regard to the case of a statute-barred debt (as to which, see Ridgeway Motors (Isleworth) Ltd v ALTS Ltd [2005] EWCA Civ 92, [2005] 1 WLR 2871, at [35], and Mittal v RP Capital Explorer Master Fund [2014] BPIR 1537 at [58]).

    However, in agreement with Mr Atherton QC I consider that such a course is neither necessary nor appropriate. Without Kaupthing's support, the Proposal would not have been approved. A further creditors' meeting would necessarily result in the rejection of the Proposal, unless Laser Trust were able to vote in favour of it on the basis of the KSA.

  • Moises Gertner v CFL Finance Ltd
    • Court of Appeal (Civil Division)
    • 30 Julio 2018

    But it is in my judgment obvious, as I have already said, that, looked at objectively, the additional consideration was intended to act and must be presumed to have acted as an inducement to Kaupthing to support an arrangement which would avoid Mr Gertner's bankruptcy.

    It was a standard published requirement which protected a defined class of creditors and applied to all clubs in the event of insolvency. It was not an ad hoc private arrangement designed to give the largest and most influential creditor an additional financial advantage not made available to any other creditor in the IVA.

  • Stein v Blake (No.2)
    • House of Lords
    • 18 Mayo 1995

    Bankruptcy set-off, on the other hand, affects the substantive rights of the parties by enabling the bankrupt's creditor to use his indebtedness to the bankrupt as a form of security. Instead of having to prove with other creditors for the whole of his debt in the bankruptcy, he can set off pound for pound what he owes the bankrupt and prove for or pay only the balance. …" Although it is often said that the justice of the rule is obvious, it is worth noticing that it is by no means universal.

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Legislation
  • The Insolvency (England and Wales) Rules 2016
    • UK Non-devolved
    • 1 de Enero de 2016
    ...... “debt” is defined in rule 14.1(3) for the purposes of administration and ... (iv) payments made as a result of an assignment or a settlement of any such action, arbitration or other dispute ......
  • Digital Economy Act 2017
    • UK Non-devolved
    • 1 de Enero de 2017
    ......CHAPTER 3 . Debt owed to the public sector . S-48 . Disclosure of information to reduce ... that year.(8) In this section—“administration”, “assignment” (of a radio frequency), “station”, “satellite system” and ......
  • Bankrupt and Insolvent Act 1857
    • UK Non-devolved
    • 1 de Enero de 1857
    ...... this Act upon any Trading, Act of Bankruptcy, Petitioning Creditor's Debt, Commission, or other Proceeding in Bankruptcy before the Commencement of ... XCIII. If any such Trader shall execute any Conveyance or Assignment by Deed of all his Estate and Effects to a Trustee or Trustees for the ......
  • Finance Act 1899
    • UK Non-devolved
    • 1 de Enero de 1899
    ......amount of the duty shall be a debt due from any such person to. Her Majesty. . (4) . (4.) For the purposes ... a sale on the market, whether that delivery constitutes a legal assignment, transfer, or negotiation or not, be deemed a marketable security ......
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Books & Journal Articles
  • Islamic financial institutions: conduits for money laundering?
    • Nbr. 23-2, May 2020
    • Journal of Money Laundering Control
    • 285-295
    Purpose: The purpose of this paper is to discuss various situations in the Islamic financial services industry that are asserted to facilitate money laundering and the counter-arguments to the asse...
    ......Further, it is said that hawalah, namely,acontract of transfer of debt, which is permissible under the Islamic commercial law[12],facilitates ...In essence, hawalah is a transfer or assignment of debt from an assignor to an assignee,which results in the debt of the ......
  • Workout management of non‐performing loans. A formal model based on transaction cost economics
    • Nbr. 26-1, February 2008
    • Journal of Property Investment & Finance
    • 59-79
    Purpose: The German banking sector has recently been facing high real estate loan default rates resulting in the accumulation of a high volume of distressed real estate debt in the banks' balance s...
    ...... in the accumulation of a high volume of distressed real estate debt in the banks’ balancesheets. As a consequence, German banks are ...The implication of banking secrecy and assignment of debt innon-performing loan transactions is also addressed by Cahn ......
  • Debt Management
    • Part II. Actions and Responses
    • Stop Vulture Fund Lawsuits
    • Poornimah Devi Sookun
    • 63-71
    5.1 What is public debt management? - 5.2 Why is public debt management important? - 5.3 How to achieve effective debt management - 5.4 Identifying loans which are targets for vulture funds
    ......• Study those loan agreements and check assignment clauses, law that is applicable to the contract, sovereignty issues, pari passu clauses, and other terms and conditions of the contract as identified ......
  • REMEDIES OF BUILDING SUB‐CONTRACTORS AGAINST EMPLOYERS
    • Nbr. 46-4, July 1983
    • The Modern Law Review
    ...... a collateral undertaking guaranteeing the contractor’s debt, but to a direct undertaking to pay the supplier direct. In ... Such a debt may be the subject of a legal assignment, indicating that there must be a debt presently in existence.62 ......
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Law Firm Commentaries
  • Blockchain In International Trade Execution
    • Mondaq UK
    ......While the statutory provisions governing the legal sale and assignment of debt are still governed in principle by legislation dating back to 1925 ......
  • Direction To Pay Amounted To An Equitable Assignment
    • Mondaq United Kingdom
    ......Harrison's company (MPH) was inserted, along with bank details. In due course Mr & Mrs Burridge obtained a third party debt order against MPH. The issue for decision in the Court of Appeal was whether the payment from West Ham at the time of the debt order was due to ......
  • Security assignments – not always what they say they are?
    • JD Supra United Kingdom
    The nature of security created under a security document does not always match its description in the document. Charlotte Drake explains how this recharacterisation risk can apply to security assig...
    ...... Is an "absolute" security assignment legal or equitable?. Legal assignments – key requirements. Lenders ... assignment will not be absolute if it is conditional, or of part of a debt. However, a security assignment can qualify (provided it is not "by way of ......
  • Security Assignments – Not Always What They Say They Are?
    • Mondaq UK
    ...... Is an "absolute" security assignment legal or equitable?. Legal assignments - key requirements. Lenders ... assignment will not be absolute if it is conditional, or of part of a debt. However, a security assignment can qualify (provided it is not "by way of ......
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Forms
  • Chapter CTM61605
    • HMRC Guidance manuals
    • Formularios de Derecho Civil, Mercantil y Registral
    .... . . Assignment or novation of debt. It may be claimed that a loan has been repaid through ......
  • Chapter IPTM7365
    • HMRC Guidance manuals
    • Formularios de Derecho Civil, Mercantil y Registral
    ....... Assignments between spouses or civil partners. An assignment of all or part of the rights under a policy or contract between spousesor .... Assignments by way of security for a debt or on discharge of a debt. An assignment of all or part of the rights ......
  • Chapter SAM110130
    • HMRC Guidance manuals
    • Formularios de Derecho Civil, Mercantil y Registral
    • HM Revenue & Customs
    ......Differences between a nomination and an assignment. A valid assignment. What to do when you receive a deed or letter of ... apply to set-offs in bankruptcy cases (S131 FA2008) and mutuality of debt is crucial, but a repayment which has been legally assigned to a third ......
  • Chapter DMBM700010
    • HMRC Guidance manuals
    • Formularios de Derecho Civil, Mercantil y Registral
    • HM Revenue & Customs
    ......Top of page. Assignment (formerly Offset). Assignment should occur at a taxpayer’s instigation. ...(the assignor) assigns their right to a repayment or other credit to a debt owed to HMRC by another taxpayer that is a different legal entity. This ......
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