On appeal from: [2018] CSIH 7

This appeal concerned a challenge to the sale by an insolvent Scottish company, Grampian MacLennan’s Distribution Services Ltd of its principal asset and place of business at a value lower than could have been achieved on the open market. The parties disputed the proper interpretation of “adequate consideration” in the Insolvency Act 1986, section 242(4)(b) and whether the court has any discretion as to the remedy it may give under that section.

The Supreme Court unanimously allowed the appeal only to the extent of remitting the case to the First Division of the Inner House to consider what is the appropriate remedy under section the 1986 Act 242(4). The Court held that the meaning of “adequate consideration” is to be determined according to an objective test, having regard to the commercial justification of the transaction in all the circumstances and assuming that the parties would be acting in good faith and at arm’s length.

For judgment, please download: [2019] UKSC 57

For Court’s press summary, please download: Court’s Press Summary

For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing please visit: Supreme Court website: 2 May 2019 (Morning session)