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Charging orders survive bankruptcy
Nov 19, 2009
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At a time when personal
insolvencies have reached the highest number on record, a recent decision may
help creditors who otherwise might find their security going up in a puff of
smoke, says partner Paul Gordon.
In the case, Nationwide had
obtained a charging order over Jonathan Wright’s home. Neither they nor the
court knew that there was a bankruptcy petition against Mr Wright. His trustee
in bankruptcy successfully asked the court to set aside the charging order but
it was overturned on appeal.
The court ruled that any creditor who had acted in
good faith and without notice of the bankruptcy petition should not be deprived
of his security merely on the basis of a later bankruptcy. There will need to
be an additional contributing factor to justify the use of the court’s
discretion.
Partner Paul Gordon worked for a number of
London firms and joined us from the City office of a top Scottish law firm. As
a specialist litigator, Paul has acted for major clients including Kohler Mira,
American Express, Morgan Stanley, GE Capital, and PizzaExpress. He has wide
experience in financial services and banking disputes as well as shareholder
and partnership matters, commercial supply, agency distribution and franchise
contracts. He frequently acts in construction disputes and advises on intellectual
property.
paul.gordon@willans.co.uk