Section Dispositions between Petition and Order: Section 127

Section 127 of the Insolvency Act 1986 avoids any disposition of the company's property made after the commencement of a winding up by the court (defined in s 129),¹ unless the court orders otherwise. Disposition is used in a broad sense,² and not used in the narrow Scottish conveyancing sense but means dealing with, settling or transferring property.³ A payment into court is not a 'disposition', even though the company does not retain any legal interest in the money.

There is a disposition only if the company has a beneficial interest in the money at the time of payment out.⁴ It has been held that if a disposition was made on the date of the commencement of winding up it will not be void.⁵ 'Void' in this context means void for all purposes related to or incidental to the administration of the winding up.⁶ The