Revenue gets Spectrum boost
House of Lords rules in government's favour
A court case affecting the eventual destination of hundreds of millions of
pounds was decided today in the government’s favour.
A House of Lords decision on the status of claims on the assets of insolvent
companies ruled that the government, as a preferential creditor, came ahead of
banks holding ‘floating’ charges on the assets.
The ‘Spectrum’ case, as it is known, is likely to release assets from an
estimated 550 insolvencies, left in limbo by legal uncertainty. Lawyers for
Allen & Overy, acting for NatWest in the Spectrum case, say the figure of
550 could itself by ‘very conservative.’
Millions of pound may be held up in those cases, it is assumed.
A 1979 case had appeared to indicate that banks held the first claim, but
that was thrown into confusion recently. The Spectrum case was fought to resolve
the issue.