Foreign Liquidators Success
In the recent decision of McGrath and Anor v Riddell and others 2008 the House of Lords allowed the application of the Australian Liquidators of the HIH insurance group, that monies collected by English Liquidators of English companies be remitted to Australia to be distributed by the Australian Liquidators in accordance with the Australian insolvency regime.
The argument made on behalf of the English Liquidators was that certain classes of English creditors would be prejudiced as a result due to the different rules in Australian law and that the transfer should not be ordered. The House of Lords rejected that argument. The majority of the Court pointed to the relevant statutory Co-operation Order of 1986 and the provisions of s426 Insolvency Act 1986 by which Australia was a state to which co-operation should be given. Some commentators have suggested that the decision will change the way that English Courts look at international insolvency proceedings and makes it easier for foreign liquidators to obtain assets from the UK. It is not clear however that the decision goes that far. It is to be noted for example that the Cross Border Insolvency Regulations 2006 (with their own regime as to co-operation derived from the UNCITRAL Model Law) came into force since the case arose.
For further information please contact Jeremy Lederman.
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