Citation(s) [2000] 1 WLR 906 | Ruling court High Court of Justice | |
 | ||
Coutts & Co v Stock [2000] 1 WLR 906 is a UK insolvency law case, concerning voidable transactions.
Contents
Facts
Coutts & Co gave Mr Stock’s company a £200,000 overdraft. Mr Stock gave a personal guarantee for it. Then came a winding up petition, as the account was £500 in credit. But by the time the petition was advertised, the account was overdrawn by £121,875 and £190,000 by the time the petition was granted. The bank honoured cheques in favour of third parties, most of which were three companies controlled by Mr Stock. Coutts & Co wanted to enforce the guarantee. Mr Stock argued the Insolvency Act 1986 section 127 prevented the bank from debiting the account, and so the bank could not recover from him.
Judgment
Lightman J held the purpose of the provision is to preserve corporate assets for the benefit of the general body of creditors by empowering the liquidator to ‘claw back’ company property transferred by directors after a winding up petition is presented.