is a leading United Kingdom insolvency law case, concerning voidable transactions. In this case, the court examined whether a series of arrangements could be understood as one "transaction" for the purposes of being an undervalue transaction under the Insolvency Act 1986. Ultimately, the court found that, for the purposes of insolvency law, it may be appropriate to consider details of a complex series of linked transactions to assess whether the transaction was undertaken at an ‘undervalue’.

Facts

Mr Phillips, the liquidator of AJ Bekhor & Co, sought to recover the £725,000 and interest for a business and asset that had been transferred to a subsidiary, which in turn was bought by Brewin Dolphin (

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) through a share purchase for £1. The question was whether this constituted a transaction at an undervalue contrary to the Insolvency Act 1986 section 238. Brewin Dolphin contended that part of the agreement was that its parent company, Private Capital Group Ltd, would pay AJ Bekhor four yearly instalments of £312,000 for renting computer equipment. The covenant for the rental had been sublet to BD by AJB despite an absolute bar in the head lease. The trial judge and the

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1 WLR 2052 refused to take the computer rental agreement into account, as part of

consideration Consideration is a concept of English common law and is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. The court in ''Currie v Misa'' declared ...

for the share transaction.

Judgment

The

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held that the transaction was effected at an undervalue, was voidable under section 238. The computer rental agreement was taken as consideration for the deal, but when assessing its value, reality and not speculative values should not be taken into account. The collateral agreement was precarious, and worthless because the headlessors had immediately declared the transaction to be a repudiatory breach, and it therefore had no value to Brewin Dolphin.

References

* United Kingdom insolvency case law House of Lords cases">0002 BCLC 438

Notes

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References

* United Kingdom insolvency case law House of Lords cases 2001 in United Kingdom case law

Facts

Judgment

See also

References

Notes

References