Recently we were appointed liquidators in a compulsory liquidation on the urgent application of the Secretary of State
In between presentation of the petition and the winding up order being made all company assets were sold by the directors for circa £20K (apparently valued independently) with the payment terms of the sale being deferred consideration over a 6-month period.
We won’t drill into the detail of Section 127 (1) of the Insolvency act but, in short, any transaction between the presentation of a petition and the making of the winding up order is void, unless ratified by the court. Having informed the transacting parties the £20K sale was void and taken advice from an agent we decided the best form of realising the assets and testing the market was by way of auction in situ. Some 5 weeks later the auction concluded with total realisations achieving £150K, which in addition to other payments made to agents over the same period will result in a better return to creditors. As the title states, the Insolvency Act is a powerful tool and used correctly certainly benefits creditors.
Should you or a client require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss and advise on your situation on 01604 212150 or email to enquiries@pbcbusinessrecovery.co.uk.