Limitations on suing a company/individual when in a formal insolvency process
Limitations on suing a company/individual when in a formal insolvency process

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Limitations on suing a company/individual when in a formal insolvency process
  • Corporate insolvency limitations
  • Liquidation
  • Administration
  • CVAs
  • Personal insolvency limitations
  • Bankruptcy
  • Individual Voluntary Arrangements (IVAs)

When a company or an individual enters into a formal insolvency or enforcement process, the goal posts shift considerably for creditors wishing to bring, or continue with, claims against the insolvent individual or entity. This is from a purely commercial and legal perspective, due to (a) the commercial viability of continuing with/bringing the claim and (b) certain statutory/contractual restrictions that will arise. This note looks at the statutory and contractual restrictions that will apply.

This note is an overview on the main factors. For further information see:

  1. Claims against companies subject to a company voluntary arrangement (CVA)

  2. The moratorium in administration

  3. Factors the court will take into account when deciding whether to lift the stay in a liquidation

Corporate insolvency limitations

The restrictions on bringing claims against a company which is in a formal insolvency process apply in liquidation, administration and to some extent company voluntary arrangements (CVAs). There is no such bar applicable with administrative receivership, or any other receivership (at least beyond any commercial factors, or normal litigation factors, such as security for costs etc). Each of the processes, where a statutory/contractual limitation applies, is considered below.

Liquidation

In liquidation, claims/actions against the company or its