Q&As

Can a contingent creditor in a members’ voluntary liquidation (MVL) force the liquidator to continue the MVL until the contingency figure is determined at a future date, or can the liquidator insist on a valuation of the future claim in order to allow for distribution and then dissolution?

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Produced in partnership with Alison Curry of Insolvency Support Services
Published on LexisPSL on 21/06/2019

The following Restructuring & Insolvency Q&A produced in partnership with Alison Curry of Insolvency Support Services provides comprehensive and up to date legal information covering:

  • Can a contingent creditor in a members’ voluntary liquidation (MVL) force the liquidator to continue the MVL until the contingency figure is determined at a future date, or can the liquidator insist on a valuation of the future claim in order to allow for distribution and then dissolution?

Under the Insolvency Rules 2016 (IR 2016), SI 2016/1024, IR 2016, SI 2016/1024, Pt 14, which determines the treatment of creditors’ claims, is applied in a member’s voluntary liquidation (MVL) by virtue of IR 2016, SI 2016/1024, r 14.1(1). It states: ‘this Part applies to administration, winding up and bankruptcy proceedings; without qualification limiting application to insolvent liquidation’.

What constitutes a provable debt in winding up (and in administration and bankruptcy) is set out in IR 2016, SI 2016/1024, r 14.2(1) as:

‘…all claims by creditors except as provided in this rule, are provable as debts against the company or bankrupt, whether they are present or future, certain or contingent, ascertained or sounding only in damages.’

For further guidance, see Practice Note: Future debts, contingent debts, secured debts—the position under the Insolvency (England and Wales) Rules 2016.

The liquidator is positively obligated to estimate the value of any debt which, by reason of it being subject to any contingency or for any other reason, does not bear a certain value; and they may revise any estimate previously made, if they think fit by reference to any change of circumstances or to i

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