The Preferential Payments in Bankruptcy Amendment Act 1897 (60 & 61 Vict. c. 19) was an Act of Parliament of the United Kingdom, affecting UK insolvency law. It amended the category of "preferential payments" for rates, taxes and wages, to take priority over a floating charge in an insolvent company's assets. The Act was passed in broad response to the decision of the House of Lords in .

Section 1 of the Preferential Payments in Bankruptcy Act 1888 first introduced the concept. It was amended by section 2 of the Preferential Payments in Bankruptcy Amendment Act 1897.

Preferential Payments in Bankruptcy Amendment Act 1897

The provisions were re-enacted in the Companies (Consolidation) Act 1908, the Companies Act 1929 and the Companies Act 1948.

Preferential Payments in Bankruptcy Amendment Act 1897

Its provisions were largely ineffective as a floating charge would invariably crystallise into a fixed charge prior to enforcement. It was not until the Insolvency Act 1986 that the definition of floating charge was expanded to include any charge which was created as a fixed charge (i.e. irrespective of subsequent crystallisation).

Preferential Payments in Bankruptcy Amendment Act 1897

See also

Re Barleycorn Enterprises Ltd [1970] Ch 465

UK insolvency law

UK bankruptcy law

History of bankruptcy law

Notes

Insolvency law of the United Kingdom

United Kingdom company law

United Kingdom Acts of Parliament 1897

1890s economic history