''Re Yagerphone Ltd''

935 Year 935 ( CMXXXV) was a common year starting on Thursday of the Julian calendar. Events By place Europe * Spring – Arnulf I ("the Bad") of Bavaria invades Italy, crossing through the Upper Adige (modern Tyrol). He proceeds ...

1 Ch 392 was a

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

decision relating to

unfair preference An unfair preference (or "voidable preference") is a legal term arising in bankruptcy law where a person or company transfers assets or pays a debt to a creditor shortly before going into bankruptcy, that payment or transfer can be set aside on t ...

s and the proceeds of any claims by a liquidator for unfair preferences, and in particular determining the priority of claims between the general body of creditors and the holder of a

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 ...

. The case held that because the power to challenge a transaction as an unfair preference was a statutory right vested in the liquidator alone, the proceeds of any action were not "property of the company" and as such they were not caught be a floating charge which was expressed to include after acquired property (distinguishing '' Re Anglo-Austrian Printing & Publishing Union''

895 __NOTOC__ Year 895 ( DCCCXCV) was a common year starting on Wednesday of the Julian calendar. Events By place Europe * The Magyars are expelled from western Siberia, and settle in the Carpathian Basin, under the leadership of Árpád ( ...

2 Ch 891). Bennett J held that the proceeds were impressed by a statutory trust for the general body of creditors.

Facts

On 14 January 1933 the company granted a

debenture In corporate finance, a debenture is a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest. The legal term "debenture" originally referred to a document that either creates a debt or acknowle ...

which contained an all-assets floating charge in favour of H. Yager (London) Limited as chargee. The debenture contained a fairly standard provision that the charge would also attach to any after-acquired property of the company. Pursuant to the debenture the chargee advanced the sume of £200 to the company. Three days later, on 17 January 1933 the company made a payment of £240, 11 s, 6 d to a creditor (who is not named in the report). On 31 March 1933 the company's members pass a resolution to put the company into

voluntary liquidation Liquidation is the process in accounting by which a Company (law), 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 :wikt:wind up#Noun, w ...

. The liquidators then sought to challenge the payment to the creditor as an unfair preference under section 265 of the

Companies Act 1929 The Companies Act 1929 ( 19 & 20 Geo. 5. c. 23) was an act of the Parliament of the United Kingdom, which regulated UK company law. Its descendant is the Companies Act 2006. Provisions Forms made under the 1929 act introduced the term "Compani ...

(which incorporated the unfair preference regime from section 44 of the

Bankruptcy Act 1914 The Bankruptcy Act 1914 ( 4 & 5 Geo. 5. c. 59) was an act of the Parliament of the United Kingdom which formed the primary source of UK insolvency law for approximately 70 years. It came into force on 1 January 1915 repealing a number of earl ...

). In the December 1933 the creditor repaid the sums to the liquidator. The debenture holder then contested that those sums were caught by the debenture, and should be paid to the debenture holder in preference to the general body of creditors.

Decision

The decision was described as a "short ''

ex tempore ''Ex tempore'' (Latin for "out of the moment“) is a law latin legal term that means 'at the time'. A judge who hands down a decision in a case soon or straight after hearing it is delivering a decision ''ex tempore''. Another way a judge may de ...

'' judgment". The report of the case in the law reports is only slightly longer than a page, although that report does omit the recitation of the facts from the oral judgment. Bennett J held that the sums did not fall within security created by the debenture. Although initially, the judgment appears to indicate that this is because the floating charge crystallised before the sum became the property of the company, later in the judgment he clarified: The headnote indicates that the judgment "distinguishes" (ie. did not follow) earlier cases such as ''Ex Parte Cooper'' (1875) LR 10 Ch 510 and ''Willmott v London Celluloid Co'' (1886) 34 Ch D 147. However those decisions are barely referred to in the judgment at all, and it is not clear that they relate to the same point in any event.

Authority

Despite being a short ''ex tempore'' first instance decision, ''Re Yagerphone'' has never seriously been doubted. It has been followed in ''

Re MC Bacon Ltd (No 2) ''Re MC Bacon Ltd''

991 Year 991 (Roman numerals, CMXCI) was a common year starting on Thursday of the Julian calendar. Events * March 1: In Rouen, Pope John XV ratifies the first Peace and Truce of God, Truce of God, between Æthelred the Unready and Richard I o ...

Ch 127 is a UK insolvency law case relating specifically to the recovery the legal costs of the liquidator (law), liquidator in relation to an application to set aside a floating charge as an unfair preference. The co ...

Ch 127 and ''

Re Oasis Merchandising Services Ltd ''Re Oasis Merchandising Services Ltd'' 998Ch 170 is a UK insolvency law and company law case, concerning wrongful trading. Facts The liquidator brought proceedings against 5 individuals, alleged to be directors or shadow directors of the ins ...

998 Year 998 ( CMXCVIII) was a common year starting on Saturday of the Julian calendar. Events By place Europe * Spring – Otto III retakes Rome and restores power in the papal city. Crescentius II (the Younger) and his followers ...

Ch 170 amongst others.

Footnotes

{{DEFAULTSORT:Yagerphone Limited, Re 1935 in British law United Kingdom insolvency case law 1935 in case law