Statute of Bankrupts Act 1542
Encyclopedia
The Statute of Bankrupts (34 & 35 Henry VIII, c. 4) was an Act
passed by the Parliament of England
in 1542. It was the first statute under English law
dealing with bankruptcy
or insolvency
. It was repealed by section 1 of the Act 6 Geo.4 c.16.
principle of distribution on insolvency.
These principles would later be heavily underscored by the House of Lords in the cases of National Westminster Bank plc v Halesowen Pressworks Ltd [1972] AC 785 and British Eagle International Airlines Ltd v Compagnie Nationale Air France
[1975] 1 WLR 758.
Act of Parliament
An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...
passed by the Parliament of England
Parliament of England
The Parliament of England was the legislature of the Kingdom of England. In 1066, William of Normandy introduced a feudal system, by which he sought the advice of a council of tenants-in-chief and ecclesiastics before making laws...
in 1542. It was the first statute under English law
English law
English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
dealing with bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
or insolvency
Insolvency
Insolvency means the inability to pay one's debts as they fall due. Usually used to refer to a business, insolvency refers to the inability of a company to pay off its debts.Business insolvency is defined in two different ways:...
. It was repealed by section 1 of the Act 6 Geo.4 c.16.
Summary
The Act contained an extremely long preamble which denounced debtors acting in fraud of their creditors, directed that the bodies of the offenders and all of their assets be taken by the requisite authorities and the assets be sold to pay their creditors "a portion, rate and rate alike, according to the quantity of their debts". Thereby the first bankruptcy statute also imported into English law for the first time the pari passuPari passu
Pari passu is a Latin phrase that literally means "with an equal step" or "on equal footing." It is sometimes translated as "ranking equally", "hand-in-hand," "with equal force," or "moving together," and by extension, "fairly," "without partiality."...
principle of distribution on insolvency.
These principles would later be heavily underscored by the House of Lords in the cases of National Westminster Bank plc v Halesowen Pressworks Ltd [1972] AC 785 and British Eagle International Airlines Ltd v Compagnie Nationale Air France
British Eagle International Airlines Ltd v Compagnie Nationale Air France
British Eagle International Air Lines Ltd v Cie Nationale Air France [1975] 1 WLR 758 is a UK insolvency law case, concerning priority of creditors in a company winding up.-Facts:...
[1975] 1 WLR 758.