''Re Barleycorn Enterprises Ltd''

970 Year 970 ( CMLXX) was a common year starting on Saturday of the Julian calendar, the 970th year of the Common Era (CE) and ''Anno Domini'' designations, the 970th year of the 1st millennium, the 70th year of the 10th century, and the 1st year ...

Ch 465 is a

UK insolvency law United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While Bankruptcy in the United Kingdom, UK bankruptcy law concerns the rules for natural persons, the term ''insolvency'' is generall ...

case, concerning the priority of creditors in a company

winding up Liquidation is the process in accounting by which a company is brought to an end. The assets and property of the business are redistributed. When a firm has been liquidated, it is sometimes referred to as wound-up or dissolved, although di ...

. It was held that fees for liquidation came in priority to preferential claims and

floating charge In finance, a floating charge is a security interest over a fund of changing assets of a company or other legal person. Unlike a fixed charge, which is created over ascertained and definite property, a floating charge is created over property of ...

s. This was overturned by the House of Lords in ''

Buchler v Talbot is a UK insolvency law case, concerning the priority of claims in a liquidation. Under English law at the time the expenses of liquidation took priority over the preferred creditors, and the preferred creditors took priority over the claims o ...

'', but reinstated by Parliament through an amendment to the

Insolvency Act 1986 The Insolvency Act 1986 (c. 45) is an act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK. History The Insolvency Act 1986 followed the publication ...

s 176ZA.

Facts

Barleycorn Enterprises Ltd had been put into compulsory winding up. The directors had employed Cardiff based chartered accountants, Mathias and Davies, to prepare a financial statement for the company. Their fee was £202 10s, and were approved by the official receiver. However, the company liquidator argued that the accountants should only be paid after preferential creditors and debenture holders. In this case, there was no money left. The judge at first instance, Sir Owen Temple Morris QC, held that the accountants had priority. The liquidator appealed.

Judgment

The Court of Appeal held that the accountants' fees fell under the expenses of liquidation.

Tom Denning, Baron Denning Alfred Thompson Denning, Baron Denning, (23 January 1899 – 5 March 1999), was an English barrister and judge. He was called to the Bar of England and Wales in 1923 and became a King's Counsel in 1938. Denning became a judge in 1944 when he w ...

gave the first judgment. Sachs LJ concurred. Phillimore LJ agreed.

Notes

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References

*'Recent developments in the law and practice relating to the creation of security for companies' indebtedness' (2009) 30(6) Company Lawyer 163-168 *'What liquidation does for secured creditors, and what it does for you' (2008) 71(5) MLR 699-733 United Kingdom company case law United Kingdom insolvency case law Court of Appeal (England and Wales) cases 1970 in United Kingdom case law Lord Denning cases

Facts

Judgment

See also

Notes

References