Borrower's Undertaking Creates Equitable Assignment Of Investment Proceeds

The High Court (Court) had to determine whether proceeds from two investments in the estate in the bankruptcy of Bernard McNamara (McNamara) were payable to NALM under its security package, or whether they should be retained in the estate in the bankruptcy of McNamara for the benefit of creditors generally (substantive question).

While McNamara was discharged from bankruptcy in March 2014, his estate remained vested in the plaintiff trustees (Bankruptcy Trustees). The defendant, NALM, was the successor in title to Anglo Irish Bank (Anglo), which had loaned sums to McNamara in 2007. Before his bankruptcy, McNamara had made two separate investments: (i) shares in a UK property fund (UK Property Fund) and (ii) an investment known as the German Geared Commercial Property Investment (GGCP Investment) (collectively "the Investments"). Signature Capital (or its related entities) managed the Investments. In January 2014, the Bankruptcy Trustees received two payments