Insolvency: ordering a sale of the family home

Comments on the Chancery Division ruling in Nicholls v Lan on whether the interests of a bankrupt husband's creditors prevailed over those of the wife, despite her circumstances being exceptional within the meaning of the Insolvency Act 1986 s.335A on account of her suffering from chronic schizophrenia, where the wife was the joint owner of another property which could be realised to buy out the trustee in bankruptcy's half share in the equity of the matrimonial home.

The mortgagee's duties on sale

Discusses the remedies available to mortgage lenders when borrowers default on their mortgage repayments. Examines aspects of the mortgagee's duty of care to the mortgagor when choosing to sell the property in terms of the timing of the sale, the mode of sale, the price obtained, and the sale of a commercial property to a party associated with the mortgagor. [From Legal Journals Index]

Oral agreements: estoppel, constructive trusts and restitution

Analyses the House of Lords judgment in Cobbe v Yeoman's Row Management Ltd in relation to claims by the prospective purchaser under an oral agreement for sale of a block of flats based on proprietary estoppel, a constructive trust and common law restitution brought against the owner of the property who sought to resile from the agreement after the purchaser had, at considerable expense, obtained planning permission to redevelop the property in reliance on assurances given by the owner that if permission was granted the sale would be honoured.

Returning to deposits...

Examines the Court of Appeal ruling in Midill (97PL) Ltd v Park Lane Estates Ltd on whether the court should exercise its discretion to return a deposit paid under a contract for the sale of a property where, despite the claimant having defaulted on its purchase, the owner obtained a higher price than would have been paid by the claimant when it subsequently sold the property to a third party. Considers the need for special or exceptional circumstances to be present to override the rule that deposits were to be forfeited upon the purchaser's default.

Deal or no deal

Discusses the pre-action protocol for mortgage possession claims which came into effect on November 19, 2008, highlighting the situations in respect of which it is suggested the lender "considers" not starting proceedings and the lenders entitlement to be informed of progress on the sale of the property. Reviews the guidance on mortgages and arrears issued by the Council for Mortgage Lenders, aimed at assisting lenders in complying with the Financial Services Agency's Mortgage Conduct of Business Rules Pt 13. [From Legal Journals Index]

Divorce deals and bankruptcy

Discusses the rights and responsibilities of trustees and beneficiaries of co-owned land under the Trusts of Land and Appointment of Trustees Act 1996, in particular s.14 which allows the court to make an order declaring the extent and nature of a person's interest in the property. Refers to the Court of Appeal decision in Avis v Turner on whether the existence of an earlier court order postponing the sale of matrimonial property following the owners' divorce meant that an application could not be brought by a trustee in bankruptcy under s.14. Considers the "exceptional circumstances" which could allow the court to postpone the sale. [From Legal Journals Index]

What's exceptional?

Outlines the factors which the court needs to consider when deciding whether to grant an application for the sale of a property where the owner becomes bankrupt. Considers the different priorities to be given to the claims of trustees in bankruptcy and to secure lenders, with reference to the Trusts of Land and Appointment of Trustees Act 1996 ss.14 and 15, the Insolvency Act 1986 s.355A, and the exceptional circumstances in which claims will not be granted. Explores case law, in particular the Court of Appeal ruling in Avis v Turner, and the implications of the Human Rights Act 1998. [From Legal Journals Index]

Trade credit linkages along the supply chain: evidence for the Italian textile sector

We examine the trade credit linkages among firms within a supply chain to reckon the effect of such linkages on the propagation of liquidity shocks from downstream to upstream firms. We choose a sample appropriate for this task, consisting of a large data set of Italian firms from the textile industry, a well known example of a comprehensive manufacturing cluster featuring a large number of small and specialized firms at each level of the supply chain. The results of the analysis indicate that the level of trade credit that firms provide to their suppliers is positively related to the level of trade credit granted to their clients: when the level of trade credit granted to clients divided by sales goes up by 1, the level of trade credit provided to suppliers divided by cost-of goods-sold goes up by an amount that varies between 0,22 and 0,52. Since all firms along the chain are linked by trade credit relationships, an increase in the level of trade credit granted by wholesalers generates a liquidity cascade throughout the chain. We designate the overall increase in the level of trade credit among all firms in the chain as a result of a unitary impulse in the level of trade credit granted by wholesalers as the multiplier effect of trade credit for the industry chain. We estimate such multiplier to vary between 1.28 and 2.04. We also investigate the effect of final demand on the level of trade credit sourced by firms at various levels of the chain and, in particular, whether such effect is amplified for firms further up in the chain as a result of liquidity propagation via trade credit linkages. We uncover evidence of such amplification when the links of liquidity transmission along the chain are individually modeled and estimated. An unitary increase in wholesalers’ sales is found to produce an effect on trade payables among firms at the top of the chain (i.e., Preparers and Spinners) that is more than twice as big as the corresponding effect among firms at the bottom of the chain (i.e., Wholesalers).