Insolvency: what can happen to the contents of the cellar?

[JacobH]

Split by jdaw1 from Latest buy, at the request of AHB.

All bought at an online insolvency auction for very reasonable prices. Looking forward to pick them up on Thursday!

We should probably have an informal agreement that should any member of be about to be declared bankrupt, the rest of us should come around to help ensure there is nothing in the cellar which can be liquidated for the creditors*

[* Disclaimer: As evidenced by the this statement was a light-hearted comment and not a statement of intent. Take notice that should bankruptcy proceedings be initiated against me, I would comply with all legal requirements concerning my chattels and would advise anyone else to do the same. ]

[DRT]

Oh dear. Jacob's little disclaimer in the above thread demostrates that even at his tender age he has fallen into the typical lawyer trait of self disclosure even when it is unnecessary to do so.

Jacob, you should now complete the circle by telling someone higher up the legal food-chain about the above post and the jest in which it was made, thereby absolving yourself of all possible blame and passing all of the risk and potential nasty consequences to the person you tell.

[JacobH]

Oh dear. Jacob's little disclaimer in the above thread demostrates that even at his tender age he has fallen into the typical lawyer trait of self disclosure even when it is unnecessary to do so.

Jacob, you should now complete the circle by telling someone higher up the legal food-chain about the above post and the jest in which it was made, thereby absolving yourself of all possible blame and passing all of the risk and potential nasty consequences to the person you tell.

The disclaimer was made on the advice of another member of ; I am personally unconvinced about its need. However, I followed the advice, on the grounds that it consisted of an assumption of responsibility for checking posts on for their legal accuracy (the advice not containing a disclaimer) and thus allowing a way of escaping liability should I post something inaccurately.

[DRT]

The disclaimer was made on the advice of another member of

Do I need to ask which member gave the advice?

[JacobH]

The disclaimer was made on the advice of another member of

Do I need to ask which member gave the advice?

Whilst we’re on the subject of disclaimers, I also disclaim the following:
i) the assumption of responsibility comment was also a light-hearted view and not a statement of intent;
ii) my reading of the Insolvency Act 1986 suggests that a person facing bankruptcy proceedings may not commit an offence if he or she drinks his own Port (though before pursuing this course, I recommend taking legal advice); and
iii) this Crasto LBV is far better than the last bottle.

[DRT]

ii) my reading of the Insolvency Act 1986 suggests that a person facing bankruptcy proceedings may not commit an offence if he or she drinks his own Port (though before pursuing this course, I recommend taking legal advice)

Subject to taking the recommended legal advice, would you, without predjudice, think that the sharing of port with one's friends whilst facing bankruptcy was permissible under the law (of England and Wales)?

[JacobH]

ii) my reading of the Insolvency Act 1986 suggests that a person facing bankruptcy proceedings may not commit an offence if he or she drinks his own Port (though before pursuing this course, I recommend taking legal advice)

Subject to taking the recommended legal advice, would you, without predjudice, think that the sharing of port with one's friends whilst facing bankruptcy was permissible under the law (of England and Wales)?

To paraphrase a PM I’ve just sent: this is an interesting point. In English personal insolvency law, this would be an s357 Insolvency Act 1986, ‟Fraudulent disposal of property” offence. This is a difficult offence, rarely prosecuted as its provisions are extremely wide. The main part is:

The bankrupt is guilty of an offence if:
i) he makes or causes to be made, or has in the period of five years ending with the commencement of the bankruptcy made or caused to be made, any gift or transfer of, or any charge on, his property;

This is not an area of criminal law with which I am familiar, but I’ve had a quick look at what the texts say on it. Firstly, my reading is that it does not cover the destruction of assets. Therefore, should the potential bankrupt drink his most valuable bottles, I doubt if he could be prosecuted. However, this may not help the offline situation, whereby the consumption of others may constitute a gift to them of those parts of the assets.

The difficulty in this section, as is probably obvious, is that five years is a long time and the potential bankrupt may have no knowledge of his impending bankruptcy. However, here s352, which provides a ‟defence of innocent intention” might come into force. For a s357 offence (unlike many others in the same Act), due to the provisions of the Human Rights Act, there is no reverse burden on the defendant (Attorney General's Reference (No 1 of 2004) [2004] EWCA Crim 1025). Therefore, should evidence be adduced that ‟nothing in the cellar which can be liquidated for the creditors” simply implied that bona fide liquidation take place by members (e.g. as a regular offline for which the host was paid for his Port), I think no offence would be committed unless the prosecution could shown, beyond reasonable doubt, that this was false. Equally, even if the offence could be made out, I wonder if it would pass the public interest test for a prosecution. Such a question would depend on the value of the estate relative to the value of the assets liquidated (as well as how close to the bankruptcy the offline took place). In any case, the unusual nature of the offence, and the even more unusual way in which it is alleged it would be committed would almost certainly make it subject to appeal for clarification on the law.

[DRT]

Jacob,

That all seems logical and the risks are clear. I would think that the solution which would protect you the most would be to sell all of your port to me for a nominal sum (say, £1) and then store it on my behalf in you cellar at an annual rate of £0:01 per Pipe per annum. Part of our contract can be an obligation on you to quality assure my port at regular intervals to advise me of optimum drinking windows. 52 sample per year +/-100% sounds reasonable to me.

In the unfortunate event of your insolvency I can simply come to your house and sieze my assets without fear of you committing an offense. Everybody wins!

Derek

[JacobH]

That all seems logical and the risks are clear. I would think that the solution which would protect you the most would be to sell all of your port to me for a nominal sum (say, £1) and then store it on my behalf in you cellar at an annual rate of £0:01 per Pipe per annum. Part of our contract can be an obligation on you to quality assure my port at regular intervals to advise me of optimum drinking windows. 52 sample per year +/-100% sounds reasonable to me.

In the unfortunate event of your insolvency I can simply come to your house and sieze my assets without fear of you committing an offense. Everybody wins!

I think you would still have the problem that it may constitute an offence to take such action (as it would be a transfer of property) if you are made bankrupt within 5 years of the transaction. Equally, I can’t see what protection I would have with your suggestion should you wish to claim your Port in the event that I am not declared bankrupt

[DRT]

I can’t see what protection I would have with your suggestion should you wish to claim your Port in the event that I am not declared bankrupt

That's easy. The storage contract would make it clear that I had no right to withdraw my asset from storage unless you become bankrupt, thereby compelling you to quality assure my stock in perpetuity until you do become bankrupt or die

[jdaw1]

Yes, ’twas I.

You folks are all barking up the wrong trees. If JacobH becomes, or has any prospect of becoming, insolvent, any transaction not at a fair market price risks being fraudulent. So what we have to do is drink his port before he has any prospect of becoming insolvent.

[smisse]

All bought at an online insolvency auction for very reasonable prices. Looking forward to pick them up on Thursday!

We should probably have an informal agreement that should any member of be about to be declared bankrupt, the rest of us should come around to help ensure there is nothing in the cellar which can be liquidated for the creditors*

[* Disclaimer: As evidenced by the this statement was a light-hearted comment and not a statement of intent. Take notice that should bankruptcy proceedings be initiated against me, I would comply with all legal requirements concerning my chattels and would advise anyone else to do the same. ]

Taking your disclaimer in cosideration, should be worried about an upcoming insolvency and make pre-arrangements to hand over your stock to

[Alex Bridgeman]

Please sir, can we snip this thread at post 27199 and move it to meaningless drivel.

I wanted to comment on the interesting nature of the bottles acquired by smisse but lost the will to do so by the time I had waded through several screens of small print and legal opinion (but not legal advice).

Please note that this post is the opinion of the writer and does not reflect the opinions of http://www.theportforum.com, its hosts, contributors, casual readers or moderators. If this post is alleged to infringe any third party rights, this allegation should be brought to the attention of its author. No references in the post to persons are to real persons, living or dead, and any similarity to real persons, living or dead, is purely coincidental.

[jdaw1]

Preceding posts split by jdaw1 from Latest buy, at the request of AHB.

[jdaw1]

The bankrupt is guilty of an offence if:
i) he makes or causes to be made, or has in the period of five years ending with the commencement of the bankruptcy made or caused to be made, any gift or transfer of, or any charge on, his property;

This is not an area of criminal law with which I am familiar, but I’ve had a quick look at what the texts say on it. Firstly, my reading is that it does not cover the destruction of assets. Therefore, should the potential bankrupt drink his most valuable bottles, I doubt if he could be prosecuted. However, this may not help the offline situation, whereby the consumption of others may constitute a gift to them of those parts of the assets.

Well, there is an argument that might protect against this. The bankrupt, we could claim, destroyed the asset by opening (and decanting) it. The other parties (that’s me!) then consumed an asset that would have had, at a subsequent auction, zero resale value. (What’s the value at Christies of an N31 decanted two weeks ago? Too little for Christies to be willing to sell it.)

I recognise that this depends delicately on timing: at the instant of decanting the value at a subsequent auction became negligible.