Limits On Liquidators: English Court Clamps Down On Broad Third-Party Document Requests

The BVI and English insolvency legislation make provision for liquidators to require third parties to disclose and deliver up information and documents relating to the insolvent company. Although liquidators in both jurisdictions are appointed as agents of the insolvent company, in a recent decision, the English courts made it clear that the applicable statutory provisions do not permit liquidators to make unlimited requests for information and documents.

In the case of Webb v Eversholt Rail Ltd [2024] EWHC 2217 (Ch), the joint liquidator of a company ("Company A") applied for an order under sections 235 and 236 of the Insolvency Act 1986, requiring a sister company ("Company B") and a law firm ("the Law Firm") to provide documents relating to Company A. Company A was part of a group of companies, of which Company B was also a part. Company B held all of Company A's books and records. The Law Firm acted for Company B.