English assets of failed companies may be sent overseas after Law Lords call for more co-operation with other jurisdictions
Accountancy Age, 10 Apr 2008
The Law Lords have paved the way for foreign liquidators to seize English assets in cross-border insolvency disputes.
Britain’s highest court put its weight behind the notion that English courts should co-operate with other jurisdictions 'as much as possible' so the holdings of bankrupt companies based abroad are given back to creditors under an umbrella system.
The House of Lords made the watershed decision in response to a liquidation case involving Australian company HIH Insurance.
The company collapsed in 2001, with HIH holding reinsurance contracts written out of London. Law Lords have now said that these assets shpuld be remitted to Australia for distribution by liquidators under Australian insolvency law.
'The ruling may shift the starting point for how UK courts consider international insolvency proceedings,' Radford Goodman, a lawyer at Norton Rose told the FT.
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