Priorities United Kingdom insolvency law
re nortel gmbh [2013] uksc 52, [39], lord neuberger since bankruptcy act 1542 key principle of insolvency law has been losses shared among creditors proportionately. creditors fall same class share proportionally in losses (e.g. each creditor gets 50 pence each £1 owed). however, pari passu principle operates among creditors within strict categories of priority set law. first, law permits creditors making contracts company before insolvency take security interest on company s property. if security refers specific asset, holder of fixed charge may take asset away free else s interest in order satisfy debt. if 2 charges created on same property, charge holder first have first access. second, insolvency act 1986 section 176za gives special priority fees , expenses of insolvency practitioner, carries out administration or winding up. practitioner s expenses include wages due on employment contract practitioner chooses adopt. controversially, court of appeal in krasner v mcmath held not i...