Q&As

A company in voluntary liquidation owns assets charged to a lender and subject to a registered charge. Can the liquidators sell the charged assets without the lender’s consent?

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Produced in partnership with Oberon Kwok of Selborne Chambers
Published on LexisPSL on 16/08/2019

The following Restructuring & Insolvency Q&A Produced in partnership with Oberon Kwok of Selborne Chambers provides comprehensive and up to date legal information covering:

  • A company in voluntary liquidation owns assets charged to a lender and subject to a registered charge. Can the liquidators sell the charged assets without the lender’s consent?

The powers of the liquidator are set out in Schedule 4, Part III of the Insolvency Act 1986 (IA 1986). The liquidator’s general power to sell is found in IA 1986, Sch 4, Pt III, para 6, which provides:

‘Power to sell any of the company’s property by public auction or private contract, with power to transfer the whole of it to any person or to sell the same in parcels.’

However, where the property being sold is subject to a charge, the liquidator has no general power under IA 1986 to sell the asset free of the security, in contrast to the

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