The Business Support and Insolvency Team at Boyes Turner acted for the joint liquidators who made a successful application for their retrospective appointment as liquidators of a company.
The case
In the case of Re Butler-Do Limited [2024] EWHC 1291 (Ch), the joint liquidators had originally been appointed as liquidators of the company when it entered creditors voluntary liquidation (CVL) In May 2021. The CVL was concluded shortly thereafter and in June 2022 the company was dissolved.
After dissolution, it became apparent that there was a cause of action which could be pursued by the company for the benefit of the estate and creditors.
Following discussions held prior to this firms involvement in the matter between the (former) liquidators and the companys former director, it was decided that steps would be taken to restore it to the Register of Companies, and it was the parties intentions that the joint liquidators would be reappointed upon restoration as its joint liquidators.
The former director filed a Claim Form for the company to be restored which was subsequently amended (with the courts permission) to include provision for the joint liquidators to be reappointed under section 108 of the Insolvency Act 1986.
The restoration order was made on 24th March 2023 and all parties had understood that the joint liquidators had been reappointed with effect from the date and the insolvency practitioners commenced work to pursue the recovery referred to above following the restoration order.
However, it later became apparent, following the subsequent instruction of this firm, that notwithstanding the former directors Claim Form had been amended to seek relief for the reappointment of the joint liquidators, no such order providing for the reappointment of the joint liquidators was actually made and whilst the company had been restored into CVL, no liquidators had in fact been reappointed.
This led to an urgent application being made for the joint liquidators retrospective appointment pursuant to section 108 of the Insolvency Act 1986.
At the hearing, Deputy Insolvency Companies Court Judge Baister pointed out that it is not uncommon for insolvency practitioners or even the courts to forget the need to re appoint liquidators.
It was accepted by the Judge that whilst the authorities dealing with retrospective appointments involve the appointment of administrators, and not liquidators, there was no reason why the same principles couldnt apply to liquidators appointments. Here, it was accepted to be ‘plainly a case where it is to the benefit of creditors and all concerned that the previous liquidators be restored to office.
The case therefore provides useful guidance that where it would be beneficial for the creditors, a Court will allow for the retrospective appointment of liquidators as well as administrators.
Get in touch with our legal team
If you have any questions surrounding appointment or reappointment of administrators or liquidators or company restorations, please do not hesitate to contact our Business Support and Insolvency team on [email protected]
