Banks no longer first in line for insolvency debts - papers 1st July

Law lords in the case of Natwest v Spectrum found employees and other creditors from insolvent companies, as well as the Inland Revenue, should be repaid book debts – ie money owed to companies - before institutional lenders. That said, lawyers are now warning this is likely to mean this could end up stretching across other fixed assets, even though this ruling is not designed to do so, so banks are more likely to demand small and medium-sized companies to use more personal assets to secure loans. THE GUARDIAN adds by suggesting banks may force small assets such as homes and cars to b...