Local London Residential Ltd, Re

Local London Residential Ltd, Re

The liquidator is not entitled to unrestricted access to the proceeds of sale of the disputed property for litigation expenses. However, the court will permit continued access to the income stream from the property up to a capped amount, with the possibility of recoupment from sale proceeds if the income stream is cut off by sale, subject to further application if funds are insufficient.

Parties
Company in Liquidation: Local London Residential Limited; Applicant: The Liquidator; Respondent: Mrs Lisa Mitchell; Respondent: Trustee in Bankruptcy of Sean Mitchell
Jurisdiction
England and Wales
Judgment Date
19 January 2004
Procedural Posture
Insolvency Application / Interlocutory Application for Access to Proceeds of Sale
Outcome
Application allowed in part
Legal Topics
Liquidator's Powers, Access to Disputed Assets, Costs in Liquidation, Freezing Injunction, Beneficial Ownership
Insolvency Company Law Family Law Liquidator's Powers Access to Disputed Assets Costs in Liquidation Freezing Injunction Beneficial Ownership

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Parties

Local London Residential Limited

Company in Liquidation

The Liquidator

Applicant

Mrs Lisa Mitchell

Respondent

Trustee in Bankruptcy of Sean Mitchell

Respondent

Procedural Posture

Insolvency Application / Interlocutory Application for Access to Proceeds of Sale

Legal Issues

  1. 1 Whether the liquidator should be permitted access to the proceeds of sale of the caravan park to fund litigation and expenses
  2. 2 Whether the liquidator's costs should be covered from disputed assets
  3. 3 Appropriate procedure for funding litigation by a liquidator

Ratio Decidendi

The liquidator is not entitled to unrestricted access to the proceeds of sale of the disputed property for litigation expenses. However, the court will permit continued access to the income stream from the property up to a capped amount, with the possibility of recoupment from sale proceeds if the income stream is cut off by sale, subject to further application if funds are insufficient.

Court Disposition

Application allowed in part

Orders

  • The liquidator may continue to receive the income stream from the property up to a cap of £50,000.
  • If the property is sold before the cap is reached, the liquidator may recoup from the proceeds of sale to reach the cap.