Courts Plc (In Liquidation) [2008] EWHC 2339 (Ch) (09 October 2008)

Courts Plc (In Liquidation) [2008] EWHC 2339 (Ch) (09 October 2008)

Section 176A(5) does not confer jurisdiction to partially disapply section 176A(2); the court may only disapply it in its entirety or not at all. The principle of pari passu distribution prevails, and there is no legislative indication permitting differential treatment among unsecured creditors based on claim size or cost/benefit analysis.

Citation
[2008] EWHC 2339 (Ch)
Parties
Company: Courts plc (in liquidation); Joint Liquidator: Christine Laverty; Joint Liquidator: Michael McLoughlin
Jurisdiction
England and Wales
Judgment Date
09 October 2008
Procedural Posture
Company Liquidation Application / Judgment on Application for Partial Disapplication and Costs Order
Outcome
qualified disapplication order refused; costs order granted
Legal Topics
Prescribed Part Distribution, Pari Passu Principle, Liquidator's Costs, Section 176 a Insolvency Act
Insolvency Company Law Prescribed Part Distribution Pari Passu Principle Liquidator's Costs Section 176 a Insolvency Act

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Parties

Courts plc (in liquidation)

Company

Christine Laverty

Joint Liquidator

Michael McLoughlin

Joint Liquidator

Procedural Posture

Company Liquidation Application / Judgment on Application for Partial Disapplication and Costs Order

Legal Issues

  1. 1 Does the court have jurisdiction under section 176A(5) Insolvency Act 1986 to partially disapply section 176A(2) for creditors with claims £28,000 or less?
  2. 2 Should the court approve the liquidators' costs from the prescribed part?

Ratio Decidendi

Section 176A(5) does not confer jurisdiction to partially disapply section 176A(2); the court may only disapply it in its entirety or not at all. The principle of pari passu distribution prevails, and there is no legislative indication permitting differential treatment among unsecured creditors based on claim size or cost/benefit analysis.

Court Disposition

qualified disapplication order refused; costs order granted

Orders

  • Refusal to make qualified disapplication order under section 176A(5) Insolvency Act 1986
  • Approval of joint liquidators' costs not exceeding £62,000 to be paid out of the prescribed part