Law Weblog

UK courts to enforce US bankruptcy rulings

Monday 9 August 2010 at 6:57 am | In News | Post Comment Since 30 July 2010, bankruptcy decisions made by US courts can be enforced in England and Wales. The Court of Appeal so ruled in the case of a trust created by Eurofinance SA. Previously US bankruptcy judgments were not enforceable in the UK unless a separate UK action had been started on the same grounds.

The Court of Appeal ruling centred around British Virgin Islands-registered Eurofinance, which was owned by Adrian Roman, a British businessman.

Eurofinance created The Consumers Trust (TCT), which carried out a sales promotion scheme to US consumers who were given cashable vouchers if they bought goods in certain shops and could redeem them after three years.

Lord Justice Ward found in his ruling that only a small number of customers redeemed the vouchers because they had to undergo “a complex and obscure process involving memory and comprehension”.

Lord Justice Ward ruled that the ordinary rules for not enforcing foreign judgments did not apply to bankruptcy proceedings, however.

The removal of the requirement for duplicative actions either side of the Atlantic is an important change.

The case may be appealed.