UK Bankruptcy Law

UK Bankruptcy Law Questions Answered by Verified Experts

Ask an Expert,
Get an Answer ASAP!

UK Bankruptcy Law

a foreign corporation owns 100% of a u.k. corp. the u.k. corp

Customer Question
a foreign corporation owns 100%...
a foreign corporation owns 100% of a u.k. corp. the u.k. corp files bankruptcy, 90% of its debts are to another foreign corp that is also 100% owned by the foreign corp. how is the debt to the related corp. handled?
Submitted: 4 years ago.Category: UK Bankruptcy Law
Show More
Show Less
Ask Your Own UK Bankruptcy Law Question
Answered in 5 minutes by:
6/27/2013
Solicitor: Alex J., Solicitor replied 4 years ago
Alex J.
Alex J., Solicitor
Category: UK Bankruptcy Law
Satisfied Customers: 3,761
Experience: 2 Years Insolvency Litigation
Verified
Hi

Thank you.

Just to confirm 90% of the debts are owed to a seperate company in a foreign jurisdiction?

Does the English company have assets? Has a liquidator been appointed?

Kind regards

AJ
Ask Your Own UK Bankruptcy Law Question
Customer reply replied 4 years ago

the english company has £372k in assets and £671j in liabilities of which £623k is owed to an australian company and a usa company both also 100% owned by the foreign company. the english company is essentially insolvent. a bankruptcy averts the cancellation of debt income, but is their income to the holding(parent) company, and can the usa & aus companies write-off the receivables on their books?

Customer reply replied 4 years ago

not in liquidation. still operating

Solicitor: Alex J., Solicitor replied 4 years ago
Hi

Thank you.

Are you suggesting that the Aus and USA companies write off the debts so there is more on the "pot" for the parent to be repaid? If so there is no issue with this under English law, I can make no comment under Aus or US law.

You can assign the insolvent company's assets to its parent however you will have to come to an agree with the unconnected 10% creditor first.

What assets does the company have?

Kind regards

AJ


Ask Your Own UK Bankruptcy Law Question
Customer reply replied 4 years ago

what is the english law pertaining to related company ownership: ifthe u.k. corp declares bankruptcy, what happens to the debt owed the related companies? the 10% can be paid to the outside creditors. must they be reported as dividends or income by the u.k. corp under u.k. tax law?

Customer reply replied 4 years ago

please respond

Solicitor: Alex J., Solicitor replied 4 years ago
THIS ANSWER IS LOCKED!
You can view this answer by clicking here to Register or Login and paying $3.
If you've already paid for this answer, simply Login.
Ask Your Own UK Bankruptcy Law Question
Customer reply replied 4 years ago

are you saying there is no dividend to the other related corporations for the difference between the bankruptcy value received, and the amount of the receivable?


Our tax accountant has stated that the stockholders of u.k. corp. owe the usa related corp the receivable, and would have to declare a dividend in the u.s. corp, thus causing income tax liability to themselves, and using the dividend to pay the receivables owed by the u.k. corp.


If all 3 companies were u.k. companies, what would be the tax ramifications. debtor company files(can they?) bankruptcy, can the receivable company write off the debt against income, or must the parent company(owning both corps.) transfer the debt to their books, and then declare a dividend in the receivable company, in order to liquidate the debt?

Customer reply replied 4 years ago

kindly respond to my question assuming all 3 companies are in u.k., are there any dividends or cancellation of debt income recognized by any of the 3 companies?


 


in other words, if the debtor company files chap 11, not recognizing cancellation of debt income, nor would the owner-parent, and the receivable-related company can write-off the uncollected receivables as bad debt expense on their u.k. tax return. thus no dividend income for any company, but the receivable company reduces income in the current yr by the bad debt write-off.

Customer reply replied 4 years ago

did not receive an answer to my questions.

Solicitor: Alex J., Solicitor replied 4 years ago
THIS ANSWER IS LOCKED!
You can view this answer by clicking here to Register or Login and paying $3.
If you've already paid for this answer, simply Login.
Ask Your Own UK Bankruptcy Law Question
Customer reply replied 4 years ago

You did not address the related company question. Of course your generalized answer is true. I'm inquiring whether it's applicable to related company debt. Can a related company write-off the receivables to another related company, when both are fully-owned by a 3rd corporation. Please answer this specific question. In actuality the 3 are from different countries, u.k., aus, and usa, but since you only know u.k. law, I then changed them to u.k. countries. Do you understand my question now? Does common ownership have any effect or consequence on whether the debtor company, can file bankruptcy, and not have to recognize income on the payables it owes a related company, whereas both are fully owned by a 3rd company. What does u.k. law permit or mandate in this case?


much obliged,


Don

Solicitor: Alex J., Solicitor replied 4 years ago
Hi

Thank you.

I am afraid your question does not make sense to me under English law. Companies are distinct legal entities it does not matter if the debtors own part of the company. If they choose to write the debt off other creditors can still put the creditor into liquidation.

As you have given me a poor service rating I am opting.

Kind regards

AJ
Ask Your Own UK Bankruptcy Law Question
Customer reply replied 4 years ago

you haven't answered my specific question, just given generalities. I'm reversing my payment.


 

Ask Alex J. Your Own Question
Alex J.
Alex J.
Alex J., Solicitor
Category: UK Bankruptcy Law
Satisfied Customers: 3,761
3,761 Satisfied Customers
Experience: 2 Years Insolvency Litigation

Alex J. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks!

RickLeeds, UK

I did not know a French Law service existed and I was very impressed with the speed of reply --- very professional. Many thanks!

Ms. BakerAlfafar, Spain

Thank you so much for your help. Your answers were really useful and came back so quickly. Great!

MaggieUSA

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

I couldn't be more satisfied! This is the site I will always come to when I need a second opinion.

JustinKernersville, NC

< Previous | Next >

Meet the Experts:

Max Lowry

Max Lowry

Advocate

69 satisfied customers

LLB, 10 years post qualification experience

Alex J.

Alex J.

Solicitor

3,761 satisfied customers

2 Years Insolvency Litigation

Buachaill

Buachaill

Barrister

22 satisfied customers

Barrister 17 years experience

John Knox

John Knox

Solicitor

12 satisfied customers

solicitor with 8 years experience

Stuart J

Stuart J

Solicitor

78 satisfied customers

PGD Law. 20 years legal profession, 6 as partner in High Street practice

Joshua

Joshua

Lawyer

63 satisfied customers

LL.B (Hons), Higher Prof. Dip. Law & Practice

Ben Jones

Ben Jones

UK Lawyer

9,178 satisfied customers

Qualified Solicitor - Please start your question with 'For Ben Jones'

< Previous | Next >

Related UK Bankruptcy Law Questions
I live in Spain but am non resident. I have been non
I live in Spain but am non resident. I have been non resident in the UK for 7 years. Is it possible to petition for bankrupcy in the UK against debts owing in the UK.… read more
F E Smith
F E Smith
Bachelor\u0027s Degree
2,007 satisfied customers
I put my business into administration approximately 10
I put my business into administration approximately 10 months and had a Personal guarentee on a leasing contract with lombard for kitchen equipment. The are now chasing me for 33k. I spoke with the ad… read more
UK
UK
Legal Adviser
Vocational, Technical or Trade Scho
1,760 satisfied customers
We have been running a rural pub for the past 2 years, which
We have been running a rural pub for the past 2 years, which is leasehold. We have got further and further into debt, and believe it best if we go in to receivership. We are a Ltd co., so could you pl… read more
F E Smith
F E Smith
Bachelor\u0027s Degree
2,007 satisfied customers
My husband was declared bankrupt in dec2004 and myself in
my husband was declared bankrupt in dec2004 and myself in feb 2005, we were both discharged the following year, two years ago my husband joined his works sharesave scheme and it is due to mature next … read more
F E Smith
F E Smith
Bachelor\u0027s Degree
2,007 satisfied customers
Been asked to provide my court case number or bankruptcy
Been asked to provide my court case number ***** bankruptcy number as been asked asked to pay a finance company back money which I don't owe from 2006. Is there anyway I can obtain Tanya of these numb… read more
ivorylounge
ivorylounge
Bachelor\u0027s Degree
35 satisfied customers
Been caught by hmrc avoiding tax 3 years ago after a lot of
Been caught by hmrc avoiding tax 3 years ago after a lot of letters trying to negotiate the value of the out come I still cant afford want they wantWhat the best solution ?Tribunal ? Bankruptcy ? Or A… read more
Jamie-Law
Jamie-Law
4,933 satisfied customers
Last year I was taking a former employee to court on a no
Dear Sir / Madam, Last year I was taking a former employee to court on a no win no fee basis. Unfortunately the chances of wining the case fell below 50-50 and my solicitor firm suggested that on that… read more
Jamie-Law
Jamie-Law
4,933 satisfied customers
Thanks for helping me in the past with removing a CCJ, your
Hi Joshua, Thanks for helping me in the past with removing a CCJ, your advice helped and I managed to get the CCJ removed. My next question is re on defaults on my credit report. I have several defaul… read more
Joshua
Joshua
Lawyer
LL.B (Hons), Prof. Dip. Law & Pract
63 satisfied customers
I have severed a stat demand ,the debt is undisputed however
I have severed a stat demand ,the debt is undisputed however saying no money to pay now wish to issue bankruptcy from 6.7 need it filling in correctly and the serving … read more
Jamie-Law
Jamie-Law
4,933 satisfied customers
If you declare yourself bankrupt in the uk and own a
if you declare yourself bankrupt in the uk and own a property in spain and havent declared it what happens and will they take it to offset debt… read more
F E Smith
F E Smith
Bachelor\u0027s Degree
2,007 satisfied customers
I was a director in my husband's company but I resigned in
I was a director in my husband's company but I resigned in march 2016 as we were getting divorced which came thru in December 2016. We have a verbal commitment on payment for the children but no finan… read more
Nick H
Nick H
LLB
115 satisfied customers
I have being made bankrupt as of Feb 2017. I haven't lived
I have being made bankrupt as of Feb 2017. I haven't lived in the uk for a long time though. The official receiver asked to have me publicly examined in court in London next Thursday. I now live in Ca… read more
Buachaill
Buachaill
Barrister
Master's Degree
22 satisfied customers
My husband was bankrupt in february 2014. In December 2017
My husband was bankrupt in february 2014. In December 2017 BDO informed us they wanted his share of the property. They have a restriction order on the property which is in joint names. I am trying to … read more
Stuart J
Stuart J
Solicitor
PGDLaw
78 satisfied customers
While working in the Czech Republic I took out a small loan.
HI While working in the Czech Republic I took out a small loan. However, I got behind in my payments and it was sent to a debt collection agency last year. I was asked to make payments within 5 days, … read more
JimLawyer
JimLawyer
GD Law
72 satisfied customers
UK: company liquidation question I registered with a
UK: company liquidation question I registered with a translation / interpretation agency last autumn. I did 2 short translation jobs in February through the agency totalling £48 approximately & sent t… read more
Stuart J
Stuart J
Solicitor
PGDLaw
78 satisfied customers
Do I have to declare that I am a former bankrupt when
Do I have to declare that I am a former bankrupt when applying for a home loadn? (10 years since discharge) … read more
Jamie-Law
Jamie-Law
4,933 satisfied customers
My friend is having some very complex financial issues and
My friend is having some very complex financial issues and on the face of it looks like bankruptcy may be her best option. How can she get comprehensive confidential advice about this?… read more
Maverick
Maverick
Doctoral Degree
6,133 satisfied customers
I left my mums address some years ago and still keep getting
I left my mums address some years ago and still keep getting chased there for a years old debt for an unpaid mobile phone bill which was in dispute. Ultimately it got passed on to a debt collection ag… read more
ivorylounge
ivorylounge
Bachelor\u0027s Degree
35 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x