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F E Smith
F E Smith, Solicitor
Category: Bankruptcy Law
Satisfied Customers: 9589
Experience:  30 years in general practice.
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I built a property which I could not sell and I am being

Resolved Question:

I built a property which I could not sell and I am being pressured by my mezzanine funder for repayment of the loan. The PG is probably enforceable, but there are some issues which I have consulted with a solicitor on and I will argue my case if and when they issue a stat demand. My question is regarding another development that I have a loan on . The loan is circa £500K and I have given an option to purchase it to a third party. The consideration being 1% of the purchase price. If I were to be made bankrupt would the administrator of the bankruptcy be able to overturn this?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  F E Smith replied 1 year ago.

Are you saying the you own of the property and you intend to transfer another property to a third party for 10% of its value?

If that’s the case, then the trustee in bankruptcy, if you were made bankrupt, would simply set this aside as a transfer undervalue.

The only time a transfer undervalue cannot be set aside by a trustee in bankruptcy would be if it was transferred to an unconnected person and had been done so for 2 years or ever connected person (partner, spouse, business partner etc, had been done for 5 years.

Can I clarify anything else for you?

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Best wishes.

FES

Customer: replied 1 year ago.
No what I am saying is that the value is around £500K and I have an independent valuation to prove this in fact I think that it valued nearer £460K .
I have given a third party an option to purchase it for £500k so therefore it has no value?
Expert:  F E Smith replied 1 year ago.

I’m sorry but I don’t understand.

You say this is a different property.

If you’ve given somebody the option to buy it for £500,000, then it must be worth £500,000 unless there is a large mortgage on that one also, a £500,000 in which case, it is in nil equity and if it is in nil equity but the trustee in bankruptcy will not be interested in touching it if there is no money.

If it would only sell for £460,000 and there is a mortgage of £500,000 on it, then it is negative equity in the trustee in bankruptcy will definitely not be interested.

Can I clarify anything else for you?

Please rate the service positive. It is an important part of the process by which experts get paid. It does not cost you anything but helps us greatly.

Best wishes.

FES

Customer: replied 1 year ago.
No Thanks you have just confirmed my opinion
Expert:  F E Smith replied 1 year ago.

I am pleased to have helped.

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