Payment to preferred creditors

In re Cromptons Leisure Machines Ltd ChD TLR 27 December

On 13 December, the day before the Court of Appeal’s judgment in Lune Metal (above) was delivered, the Chancery judge in this case said that the issue whether the court had power to sanction such a distribution had been considered by eight judges of first instance; six had said that the court did have jurisdiction and two that it did not. The time had come when the law should be taken as settled at first instance without the need for further argument that there was power under the unamended Insolvency Act 1986 and under the court’s inherent jurisdiction to make the distribution. It appears that his decision stood for only 24 hours when next day the Court of Appeal delivered its judgment to the contrary.