Bankruptcy and family financial remedy proceedings

The relationship between bankruptcy and financial remedy proceedings has been analysed in a number of cases in both the bankruptcy and family courts. It is not uncommon for bankruptcy proceedings to be in existence while an application for a financial remedy under the Matrimonial Causes Act 1973 (MCA 1973) or the Civil Partnership Act 2004 (CPA 2004) is ongoing. Concurrent proceedings can create conflict when it comes to the division of assets and impact the financial remedy proceedings. There are also instances of bankruptcy proceedings being commenced with the dominant intention of frustrating financial remedy proceedings.

The three main considerations regarding bankruptcy proceedings in terms of their effect on financial remedy proceedings are:

  1. the position of each court when there are concurrent bankruptcy and financial remedy proceedings

  2. the powers the court has to set aside bankruptcy proceedings if they were commenced to defeat the other party’s application for a financial remedy

  3. the circumstances in which the bankruptcy court can unwind financial remedy orders, including property adjustment orders

See Practice Note: Dos and don'ts for family lawyers when

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Powered by Lexis+®
Latest Family News

High Court judgment demonstrates usefulness of section 423 of the Insolvency Act 1986 in Schedule 1 claims (Re P (A Child) (Financial Provision))

Family analysis: In this Schedule 1 case the mother received, for her son’s benefit: a housing fund of nearly £1m (the property to be held on trust); child maintenance (including ‘HECSA’/carer’s allowance) until completion of his first degree; and lump sums in respect of his capital needs and her own substantial liabilities (chiefly relating to her unpaid legal fees). The father (whose resources could be measured in the ‘tens of millions of pounds’) had sought to prejudice the mother’s claims via transferring his valuable shares to family members, who then transferred the same into a trust structure (settled under Czech law). A further onwards transfer was then made of the trust’s assets into a Liechtenstein foundation. Inferences were drawn by the court in respect of the level of the father’s wealth, and specifically as to the value of the transferred shares. Detailed findings were made against him in respect of the identified transactions, which had been the focus of the mother’s section 423 application. Although a section 423(2) order was not actually made, the application was adjourned pending the father’s compliance with the award, with security in the sum of £600,000 also ordered, alongside a continuation of the freezing orders made earlier in the proceedings. David Wilkinson, solicitor at Slater Heelis, considers the issues.

View Family by content type :

Popular documents