Preferential Payments in Bankruptcy Amendment Act 1897
The Preferential Payments in Bankruptcy Amendment Act 1897 (60 & 61 Vict. c. 19) was an Act of Parliament of the United Kingdom, affecting UK insolvency law. It amended the category of "preferential payments" for rates, taxes and wages, to take priority over a floating charge in an insolvent company's assets. The Act was passed in broad response to the decision of the House of Lords in Salomon v A Salomon & Co Ltd [1896] UKHL 1, [1897] AC 22.[1]
| Citation | 60 & 61 Vict. c. 19 |
|---|---|
Section 1 of the Preferential Payments in Bankruptcy Act 1888 first introduced the concept. It was amended by section 2 of the Preferential Payments in Bankruptcy Amendment Act 1897.
The provisions were re-enacted in the Companies (Consolidation) Act 1908, the Companies Act 1929 and the Companies Act 1948.
Its provisions were largely ineffective as a floating charge would invariably crystallise into a fixed charge prior to enforcement. It was not until the Insolvency Act 1986 that the definition of floating charge was expanded to include any charge which was created as a fixed charge (i.e. irrespective of subsequent crystallisation).
See also edit
Notes edit
- ^ Re Spectrum Plus Ltd [2005] UKHL 41 at paragraph 132, per Lord Walker: "Saloman v Saloman & Co Ltd was decided by this House on 16 November 1896. WIth remarkable promptness Parliament responded by enacting sections 2 and 3 of the Preference Payments in Bankrtupcy Amendment Act 1897".