Validity of security—key cases


Published by a ½Û×ÓÊÓƵ Banking & Finance expert
Practice notes

Validity of security—key cases


Published by a ½Û×ÓÊÓƵ Banking & Finance expert

Practice notes
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This Practice Note sets out certain key cases and associated relevant content relating to the validity of security. The cases are divided by topic area and include:

  1. •

    Voidable transactions

  2. •

    undue influence

  3. •

    execution issues

  4. •

    Capacity of the borrower

  5. •

    Further advances

  6. •

    Contractual restrictions

Voidable transactions

Names of partiesJudgment dateCase summaryRelevant content
Re MC Bacon Ltd [1990] BCLC 32430 November 1989Security given by an entity to secure its own debt is not seen as depleting the value of the security provider's assets; the security provider does not lose any value by creating security, it only gives priority to some of its liabilities over others.
To show that a transaction was a voidable preference within the meaning of section 239 of the Insolvency Act 1986 (IA 1986), it was necessary to show that the company was influenced by a desire to produce the effect set out in IA 1986, s 239(4)(b).		See Articles: Transactions at an undervalue - a new departure? (2006) 22 IL and P 222

Preference - when
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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Undue influence definition
What does Undue influence mean?

The equitable doctrine by which a will will be set aside if procured by undue influence.

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