Dissolution, Debt and Third-party Security: Wright v Wright

Without a debtor, there can be no debt. And without a debt to secure, a right in security is ineffective. These central principles of Scots law were addressed and challenged in Wright v Wright,1 a recent judgment of the Sheriff Appeal Court. Faced with an unusual set of facts, the Court held firm to doctrinal Scots law. In doing so, it provided a helpful reminder of why creditors should consider whether a third-party security is sufficient protection against a debtor company’s default.