Factors the court will take into account when deciding whether to lift or impose a liquidation stay
Produced in partnership with Kate Rogers of Radcliffe Chambers

The following Restructuring & Insolvency practice note produced in partnership with Kate Rogers of Radcliffe Chambers provides comprehensive and up to date legal information covering:

  • Factors the court will take into account when deciding whether to lift or impose a liquidation stay
  • Coronavirus (COVID-19)
  • What is a liquidation stay and what is its effect?
  • When the liquidation stay applies and its effect
  • Factors the court will apply when either lifting the liquidation stay or imposing it
  • How to make an application to lift the liquidation stay

Factors the court will take into account when deciding whether to lift or impose a liquidation stay

Coronavirus (COVID-19)

This content is affected by the coronavirus (COVID-19) pandemic. For further details, take a look at our Coronavirus (COVID-19) toolkit. For related news, guidance and other resources to assist practitioners working on restructuring and insolvency matters, see: Coronavirus (COVID-19)—Restructuring & Insolvency—overview.

What is a liquidation stay and what is its effect?

A liquidation stay (when in force) has similar effects to a moratorium/interim moratorium in an administration under paragraphs 43 and 44 of Schedule B1 to the Insolvency Act 1986 (IA 1986). For further reading in respect of the moratorium in an administration, see Practice Note: The moratorium in administration.

A liquidation stay means that no action or proceedings can be commenced or continued with against the company in liquidation without the permission, or leave, of the court.

This Practice Note explores when the liquidation stay applies, its effect, and the factors the court will consider when deciding to lift the stay (or, where appropriate, impose it).

When the liquidation stay applies and its effect

A liquidation stay, unlike a moratorium/interim moratorium in an administration, is not automatic in all liquidations. It applies as follows:

  1. compulsory liquidation—where a winding-up order has been made, or a provisional liquidator has been appointed, no action or proceeding may be commenced or continued with against the company

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