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Bevan and another v Walker and others (2018)

Mr Walker was appointed as Liquidator of Domestic & General Insulation Limited (“the Company”) under a Members’ Voluntary Liquidation. Several months later, this was converted to a Creditors’ Voluntary Liquidation, and Simon Chandler and Scott Bevan were appointed as Joint Liquidators at a creditors’ meeting convened by Mr Walker.

Bevan and Chandler became concerned about their appointment as Liquidators, which was also dependent on the validity of Walker’s appointment.

Their concern was based on s84(1)(b) of the Insolvency Act 1986, whereby a company may be wound up voluntarily if such a special resolution is passed. However, in this case, required notice of the resolution was not given to HSBC as qualifying floating charge holders over the Company.

Walker was the only one who had the ability to convene a creditors’ meeting, and if he was not validly appointed, he would have had no authority to appoint Bevan and Chandler as Joint Liquidators.

Bevan and Chandler did not believe that the Bank’s qualifying floating charge was enforceable at the time of the creditors’ meeting.

The High Court held that the initial resolution and successive appointments of Walker and then Bevan and Chandler were valid, despite finding that HSBC were a qualifying floating charge holder and should have been given notice of the special resolution to wind up the Company.

The Court held that the resolution was effective in spite of the failure to give notice.

Posted: 12.04.2018
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