Interference with goods in an insolvency situation

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • Interference with goods in an insolvency situation
  • Application to insolvency
  • Torts (Interference with Goods) Act 1977
  • Notice procedure—Torts (Interference with Goods) Act 1977
  • Serving notice
  • Selling the goods
  • Practical points
  • Seeking a court order

Interference with goods in an insolvency situation

Application to insolvency

Following an appointment, an office-holder will need to establish what goods are in his/her possession and the ownership of such goods. Goods that belongs to the company or individual may be sold and the proceeds distributed to creditors. There may be goods that do not belong to the company or individual to which the office-holder has been appointed but which the office-holder must deal with.

Commonly, there will be goods which are the subject of retention of title clauses (for further information, see Practice Note: Dealing with suppliers, customers and ROT claims) and the obligation is on the office-holder to allow a creditor access to a premises to establish a retention of title claim is well established.

A less well-known but useful tool is the ability of the office-holder to dispose of goods in their possession belonging to a third party using the Torts (Interference with Goods) Act 1977 (T(IG)A 1977). Such goods might, for example, be items or equipment belonging to a former tenant of the business premises. The office-holder in such a situation will be an involuntary bailee of the goods and could be liable in conversion if they sell the goods and offset them against arrears (see Practice Note: Tort—the different types of tort—The tort of trespass to goods—the tort of conversion), or liable for

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