Grantly Developments & Ors v Clydesdale Bank Plc & Ors [2001] ScotCS 251 (6 November 2001)

Grantly Developments & Ors v Clydesdale Bank Plc & Ors [2001] ScotCS 251 (6 November 2001)

Recall of sequestration will not be granted where there is a valuable asset (the action against the bank) that could benefit creditors, and the proposed assignation does not adequately protect creditor interests. The petitioners are entitled to a proof to attempt to show that sequestration serves no purpose or that the bank is barred from objecting to recall.

Citation
[2001] ScotCS 251
Parties
Petitioners: Grantly Developments and Others; Respondents: Clydesdale Bank Plc and Others
Jurisdiction
Scotland
Judgment Date
06 November 2001
Procedural Posture
Petition for Recall of Sequestration / Interlocutory; Motion for Recall of Sequestration, Decision on Whether to Allow Proof
Outcome
Refusal of recall of sequestration at this stage; proof allowed.
Legal Topics
Recall of Sequestration, Trustee's Duties, Creditor Protection, Assignment of Claims
Insolvency Bankruptcy Recall of Sequestration Trustee's Duties Creditor Protection Assignment of Claims

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Parties

Grantly Developments and Others

Petitioners

Clydesdale Bank Plc and Others

Respondents

Procedural Posture

Petition for Recall of Sequestration / Interlocutory; Motion for Recall of Sequestration, Decision on Whether to Allow Proof

Legal Issues

  1. 1 Whether sequestration should be recalled where the only asset is a claim against the bank and the trustee declines to act
  2. 2 Whether the interests of creditors are protected if sequestration is recalled
  3. 3 Whether the bank is using sequestration to block litigation against itself

Ratio Decidendi

Recall of sequestration will not be granted where there is a valuable asset (the action against the bank) that could benefit creditors, and the proposed assignation does not adequately protect creditor interests. The petitioners are entitled to a proof to attempt to show that sequestration serves no purpose or that the bank is barred from objecting to recall.

Court Disposition

Refusal of recall of sequestration at this stage; proof allowed.

Orders

  • Refuse to recall sequestration in hoc statu
  • Allow petitioners a proof