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Re Core VCT plc (in Liquidation)

Re Core VCT plc (in Liquidation)

This case concerned the restoration of a company to the Register in order for it to be liquidated again.

Three Core VCT companies had been dissolved following successful MVLs. Former shareholders then applied to restore the companies to the Register, and for new liquidators to be appointed under s108 [IA86?]. The grounds for this was that they considered that the companies’ affairs had not been conducted properly, both prior to, and during the liquidation.

The new liquidators made an application to court for court assistance in obtaining information from the former managers and liquidators of the companies. The former managers and liquidators also applied to court, seeking to reverse the earlier applications to restore the companies to the Register and/or the appointment of the new liquidators.

The judge rejected the submission by the former managers and liquidators that the companies’ members’ decision to appoint and then release the former liquidators was binding. The court said that it could not be conclusive in this regard.

More importantly, the judge held that an application for a company to be restored is made ex parte; i.e. that the applicant will be subject to full disclosure. It transpired that the judge that had made the restoration orders had been misinformed that the Registrar of Companies had been informed of the members’ intention to not provide notice to the former liquidators, and had consented to the same. The original judge had also not been informed that the former liquidators had been released at meetings of the members.

The judge in this case did not consider these matters to be material to the application, or that they would have caused the previous judge to reach a different decision.

It was also held that there was no injustice in the former liquidators not being given the opportunity to attend the previous hearing. They were not entitled to appear.

Lastly, it was held that where companies have been properly restored to the Register, and new liquidators have been appointed, those parties that seek to remove the new liquidators must show cause for their removal. The former liquidators could not be appointed due to a conflict of interest, in that they would be reviewing their own work from the first liquidations.

Posted: 18.06.2019
Tags:  newsletter
 


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