Preferential Payments in Bankruptcy Amendment Act 1897

{{Use Oxford spelling|date=April 2017}}

{{Use dmy dates|date=April 2017}}

{{Infobox UK legislation

|short_title=Preferential Payments in Bankruptcy Amendment Act 1897

|parliament=Parliament of the United Kingdom

|long_title=

|citation=60 & 61 Vict. c. 19

|introduced_by=

|territorial_extent=

|royal_assent=

|commencement=

|repeal_date=

|amendments=

|related_legislation=

|repealing_legislation=

|status=

|original_text=

|legislation_history=

}}

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 {{Cite bailii|litigants=Salomon v A Salomon & Co Ltd|year=1896|court=UKHL|num=1|parallelcite=[1897] AC 22}}.{{cite bailii|litigants=Re Spectrum Plus Ltd|year=2005|court=UKHL|num=41}} at paragraph 132, per Lord Walker: "Saloman v Saloman & Co Ltd was decided by this House on 16 November 1896. WIth remarkable promptness Parliament responded by enacting sections 2 and 3 of the Preference Payments in Bankrtupcy Amendment Act 1897".

Section 1 of the Preferential Payments in Bankruptcy Act 1888 (51 & 52 Vict. c. 62) first introduced the concept. It was amended by section 2 of the 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.

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).