Preferential Payments in Bankruptcy Amendment Act 1897
| Act of Parliament | |
| Long title | An Act to amend the Law regarding Preferential Payments in the case of Companies. |
|---|---|
| Citation | 60 & 61 Vict. c. 19 |
| Territorial extent | [b] |
| Dates | |
| Royal assent | 15 July 1897 |
| Commencement | 15 July 1897[c] |
| Repealed | 1 April 1909 |
| Other legislation | |
| Repealed by | |
| Relates to |
|
Status: Repealed | |
| Text of statute as originally enacted | |
The Preferential Payments in Bankruptcy Amendment Act 1897 (60 & 61 Vict. c. 19) was an act of the Parliament of the United Kingdom, affecting UK insolvency law. It amended the category of "preferential payments" for rates, taxes and wages, to take priority over a floating charge in an insolvent company's assets. The act was passed in broad response to the decision of the House of Lords in Salomon v A Salomon & Co Ltd [1896] UKHL 1, [1897] AC 22.[1]
Section 1 of the Preferential Payments in Bankruptcy Act 1888 (51 & 52 Vict. c. 62) first introduced the concept. It was amended by section 2 of the Preferential Payments in Bankruptcy Amendment Act 1897.
The provisions were re-enacted in the Companies (Consolidation) Act 1908 (8 Edw. 7. c. 69), the Companies Act 1929 (19 & 20 Geo. 5. c. 23) and the Companies Act 1948 (11 & 12 Geo. 6. c. 38).
Its provisions were largely ineffective as a floating charge would invariably crystallise into a fixed charge prior to enforcement. It was not until the Insolvency Act 1986 that the definition of floating charge was expanded to include any charge which was created as a fixed charge (i.e. irrespective of subsequent crystallisation).
Subsequent developments
The whole act was repealed by section 286(1) of, and part I of the sixth schedule to, the Companies (Consolidation) Act 1908 (8 Edw. 7. c. 69).
See also
- Re Barleycorn Enterprises Ltd [1970] Ch 465
- UK insolvency law
- UK bankruptcy law
- History of bankruptcy law
Notes
- ^ Section 1.
- ^ Section 5.
- ^ The Acts of Parliament (Commencement) Act 1793.
References
- ^ Re Spectrum Plus Ltd [2005] UKHL 41 at paragraph 132, per Lord Walker: "Saloman v Saloman & Co Ltd was decided by this House on 16 November 1896. With remarkable promptness Parliament responded by enacting sections 2 and 3 of the Preference Payments in Bankruptcy Amendment Act 1897".