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ARTICLE · 13 APRIL 2018

UK Court: Process Failure Does Not Invalidate Liquidator Appointment

Pinsent Masons
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Ceda Limited, Decka Limited and Melad Limited were in CVL. Purported creditor Cash Generator Limited challenged the appointment of the joint liquidators to the companies.

United KingdomInsolvency/Bankruptcy/Re-Structuring
Tom Withyman
Tom Withyman
Richard Williams
Richard Williams
  • Directors' process failure did not invalidate liquidator appointment
  • Deemed consent procedure
  • CEDA Ltd v Fortune [2018] EWHC 674 (Ch)

Speed Read

LEGAL UPDATE: The High Court has said that the failure by company directors to send notice of the deemed consent procedure for the nomination of joint liquidators in a creditors voluntary liquidation (CVL), did not invalidate the appointment of the liquidators. The creditor's argument that the liquidators should be removed for other reasons was also rejected.

The decision that the appointment will not be invalid if notice of the nomination procedure is not sent to all creditors of the company will be welcomed by liquidators because it is often impossible to identify all creditors of a company if the books and records of the company are not up to date or if a creditor is not known to exist.

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