Q&As

How can a limited company which is planning on going into liquidation as a result of coronavirus (COVID-19) pursue a civil claim where proceedings have not yet been issued? What implications will liquidation have on pursuing the claim and could the claim be pursued under an individual's name instead?

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Published on LexisPSL on 08/09/2020

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • How can a limited company which is planning on going into liquidation as a result of coronavirus (COVID-19) pursue a civil claim where proceedings have not yet been issued? What implications will liquidation have on pursuing the claim and could the claim be pursued under an individual's name instead?

Once a company goes into liquidation (whether compulsorily following the making of a winding-up order, or voluntarily following the passing of a resolution by the company's members), the company remains a separate legal personality notwithstanding liquidation, and remains the legal owner of its property which it holds on trust for its creditors in accordance with the provisions of the Insolvency Act 1986 (IA 1986). Accordingly, the company will remain the legal owner of the cause of action.

For further reading, see Commentary: Property available for distribution, Bailey & Groves: Corporate Insolvency—Law & Practice, para [22.1].

It is one of the main duties of a liquidator in a liquidation to ensure that the assets of the company are g

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