BISHOPSGATE INVESTMENT MANAGEMENT LTD (IN LIQUIDATION) V HOMAN AND OTHERS
| DOI | https://doi.org/10.1108/eb024840 |
| Pages | 179-184 |
| Date | 01 February 1995 |
| Published date | 01 February 1995 |
| Author | DILLON, LEGGATT,HENRY LJJ,Joanna Gray |
| Subject Matter | Accounting & finance |
CASE
LAW
BISHOPSGATE
INVESTMENT MANAGEMENT LTD
(IN
LIQUIDATION) V HOMAN AND OTHERS
(COURT
OF
APPEAL)
DILLON,
LEGGATT
AND
HENRY
LJJ
Date of
Hearing:
7th and 8th March and 23rd
June,
1994
Date of Judgment: 12th July, 1994
THE FACTS
This case concerned an attempt by
the liquidators of Bishopsgate
Investment Management Ltd (BIM)
the trustee of assets belonging to
pension schemes for employees of
Maxwell companies to recover some
of the large amounts of BIM's pen-
sion fund monies which had been
improperly paid into bank accounts
of Maxwell Communication Cor-
poration PLC group companies and
private sector companies owned by
Maxwell, his family and trusts set up
by him.
Each time BIM's pension fund
monies were paid into accounts of
Maxwell Communication Corpora-
tion PLC (MCC) those accounts were
either overdrawn or subsequently
became overdrawn.
Following Robert Maxwell's death
in November 1991 it became appar-
ent that MCC was insolvent and in
December 1991 UK administrators
were appointed and MCC was
placed in Ch XI protection under
US bankruptcy legislation (an equiv-
alent jurisdiction to the making of
an administration order under UK
insolvency law). In July 1993 a plan
for reorganisation was approved by
the US Court and a Scheme of
Arrangement was approved by the
Companies Court which had the
effect of pooling MCC assets in both
jurisdictions into a single fund.
The administrators of MCC were
keen to get on with their task and
having sold a substantial amount of
MCC's assets planned to make an
interim distribution to MCC credi-
tors.
However, they felt constrained
from doing this by the obstacle of
the claim made by BIM that it was
entitled to a prior equitable charge
(in priority to all MCC's unsecured
creditors) for the full amount of
pension monies improperly paid to
MCC.
It was upon the MCC administra-
tors seeking directions from the
Companies Court regarding whether
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