Section 426 meaning

Cases in which a transfer of assets may be ordered Large insolvencies are ever more cross-border in nature. A company may maintain places of business, assets and creditors across several jurisdictions. In these circumstances, questions arise as to how the company’s assets can be most effectively preserved pending an orderly distribution to creditors, and how creditors domiciled in a particular state may be properly protected. A cost-efficient route is to have a single set of insolvency proceedings—typically in the place of incorporation—with the office-holder’s authority recognised in every jurisdiction where the company holds assets or has creditors (see Re Cambridge Gas Transportation). The strength of this approach is enhanced by relief available under the United Nations Commission on International Trade Law (UNCITRAL) Model Law (see Practice Note: Recognition and other applications under the Cross-Border Insolvency Regulations) and, where appropriate, section 426 of the Insolvency Act 1986 (IA 1986) (see Practice Note: Court-to-court assistance and Insolvency Act 1986, s 426). Practitioners should, however, be mindful that the principle...

This glossary sets out numerous expressions frequently encountered in the restructuring arena. Words appearing in the definitions in bold are explained in other entries in this glossary. For further banking terminology, see the principal Banking & Finance Glossary. Restructuring glossary—A Acceleration: Acceleration means the agent, acting on directions from the majority lenders after an event of default, takes formal action, for example calling for early repayment of the facility. Ad-hoc committee: A temporary creditors’ group (often contrasted with a formal committee) that lacks any entitlement to official recognition. Administration: A process under the IA 1986 in which a financially distressed company is operated by an administrator as a going concern before longer-term outcomes, such as break-up and sale, are pursued. Administrator: An Insolvency Practitioner named by the court, a Qualifying floating charge holder, the directors or the company, to take control and fulfil one of the purposes in IA 1986, Sch B1. Administrative receivership: Arises when a company breaches the terms of...

This glossary sets out numerous expressions regularly encountered in the restructuring & insolvency sphere. Words shown in bold within definitions are themselves explained in other entries in this glossary as well. A Article X The MLIJ contains a single provision named Article X, aimed at jurisdictions that have already implemented the MLCBI, like England, or are weighing its adoption. Article X states: ‘Not withstanding any prior interpretation to the contrary, the relief available under [insert a cross-reference to the legislation of this State enacting Article 21 of the UNCITRAL Model Law on Cross-Border Insolvency] includes recognition and enforcement of a judgment’ (see Practice Note: UNCITRAL model law on recognition and enforcement of insolvency-related judgments (MLIJ): Article X). Asset-backed security (ABS) A form of security anchored by asset pools, for example loans, leases, and credit card receivables. Assimilated law From 1 January 2024, ‘retained law’ has been retitled ‘assimilated law’. The body of domestic law originally arising from EU obligations, created by the European...