Removal of voluntary liquidator by creditors' decision procedure

Produced in partnership with Simon Hunter of Three Stone

Practice notes

Removal of voluntary liquidator by creditors' decision procedure

Produced in partnership with Simon Hunter of Three Stone

Practice notes

A voluntary liquidator can only be removed by an order of the court or:

•
in the case of a members’ voluntary winding up (MVL), by a general meeting of the company summoned specially for that purpose, or
•
in the case of a creditors’ voluntary winding up (CVL), by a decision of the company's creditors made by a qualifying decision procedure instigated specially for that purpose

This Practice Note deals with the latter.

Procedure for removal of a voluntary liquidator

Proposal of decision procedure

A decision procedure must be instigated under section 171(2)(b) of the Insolvency Act 1986 (IA 1986) for the removal of the liquidator if 25% in value of the company’s creditors, excluding those connected with the company, request it. This is unless the liquidator was appointed by the court under IA 1986, s 108 in which case a qualifying decision procedure is to be instigated only if:

•
the liquidator thinks fit
•
the court directs, or
•
not less than 50% in value of the company’s creditors request it

While

Access this content for free with a 7 day trial of ��Ӱ�� and benefit from:

Instant clarification on points of law
Smart search
Workflow tools
42 practice areas

Would you also like a quote?

I confirm I am a lawyer or work in a legal capacity, intend to use ��Ӱ�� products for business purposes and agree with the terms and conditions.^**

^**Trials are provided to all ��Ӱ�� content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these ��Ӱ�� services please email customer service via our online form. Free trials are only available to individuals based in the UK, Ireland and selected UK overseas territories and Caribbean countries. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.

Simon Hunter

Three Stone

Simon was called to the Bar in 2009 and practices in chancery and commercial law from Three Stone. His practice has a particular emphasis on insolvency and property, but takes in the full range of chancery and commercial work done in his chambers.

Jurisdiction(s):

United Kingdom

Key definition:

Insolvency definition

What does Insolvency mean?

This can be defined by two alternative tests (Insolvency Act 1986, s 123):

• cash flow test: a company is solvent if it can pay its debts as they fall due, no matter what the state of its balance sheet (Re Patrick & Lyon Ltd [1933] Ch 786);

• balance sheet test: a company which can pay its debts as they fall due may be insolvent if, according to its balance sheet, liabilities (including contingent liabilities) exceed assets.

��Ӱ��