Torotrak Plc, Re (Re the Insolvency Act 1986) [2023] EWHC 115 (Ch) (05 January 2023)

Torotrak Plc, Re (Re the Insolvency Act 1986) [2023] EWHC 115 (Ch) (05 January 2023)

The court has no power to limit distribution of surplus to only the top shareholders; section 107 of the Insolvency Act 1986 and the company's articles require distribution to all members according to their rights and interests. However, the court may direct proportionate steps for notification and tracing of members, including writing to last-known addresses, advertising in the London Gazette, and setting a cut-off date for claims. The liquidators' remuneration cap may be increased for additional work required by these steps. The court grants prospective relief to the liquidators for distributing the surplus in accordance with these directions.

Citation
[2023] EWHC 115 (Ch)
Parties
Applicant (joint Liquidator): Scott Christian Bevan; Applicant (joint Liquidator): Simon David Chandler; Company: Torotrak Plc (in Liquidation)
Jurisdiction
England and Wales
Judgment Date
05 January 2023
Procedural Posture
Insolvency Application (directions in Liquidation) / Application for Court Directions Under Section 112 Insolvency Act 1986
Outcome
Application granted in part; directions given for distribution to all members with proportionate notification steps; increase in liquidators' remuneration for additional work approved; prospective relief granted to liquidators.
Legal Topics
Distribution of Surplus in Liquidation, Liquidators' Remuneration, Tracing and Notification of Members, Court Directions Under Insolvency Act 1986, Relief for Liquidators Under Companies Act 2006
Insolvency Company Law Distribution of Surplus in Liquidation Liquidators' Remuneration Tracing and Notification of Members Court Directions Under Insolvency Act 1986 Relief for Liquidators Under Companies Act 2006

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Parties

Scott Christian Bevan

Applicant (joint Liquidator)

Simon David Chandler

Applicant (joint Liquidator)

Torotrak Plc (in Liquidation)

Company

Procedural Posture

Insolvency Application (directions in Liquidation) / Application for Court Directions Under Section 112 Insolvency Act 1986

Legal Issues

  1. 1 Whether the court can direct a distribution of surplus to only a subset of members (top shareholders) rather than all members according to their rights
  2. 2 What steps are proportionate and required to trace members for distribution
  3. 3 Whether the liquidators' remuneration cap can be increased for additional work in distribution

Ratio Decidendi

The court has no power to limit distribution of surplus to only the top shareholders; section 107 of the Insolvency Act 1986 and the company's articles require distribution to all members according to their rights and interests. However, the court may direct proportionate steps for notification and tracing of members, including writing to last-known addresses, advertising in the London Gazette, and setting a cut-off date for claims. The liquidators' remuneration cap may be increased for additional work required by these steps. The court grants prospective relief to the liquidators for distributing the surplus in accordance with these directions.

Court Disposition

Application granted in part; directions given for distribution to all members with proportionate notification steps; increase in liquidators' remuneration for additional work approved; prospective relief granted to liquidators.

Orders

  • Liquidators to write to all known members at last-known addresses inviting claims within a specified period and stating cut-off date.
  • Single advertisement to be placed in the London Gazette with similar information and cut-off date.