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The nature of disclaimer

Disclaimer is a statutory procedure which is governed by the Insolvency Act 1986 (IA 1986) and Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024 that empowers liquidators and trustees in bankruptcy (trustees) to disclaim any onerous property (IA 1986, ss 178–182 (liquidation) and IA 1986, ss 315–321 (bankruptcy)).

Onerous property is in each case defined as:

  1. •

    any unprofitable contract

  2. •

    any other property which is unsaleable or not readily saleable or is such that it may give rise to a liability to pay money or perform any other onerous act

The form of onerous property that is most commonly encountered by office-holders is leasehold property, but disclaimer is in not in any way limited to leases. It applies to any contract or property that falls within the scope of the statutory definitions.

For further reading on what constitutes onerous property, see Practice Note: What is considered onerous property or contracts?

Once disclaimer has occurred then, unless and until a vesting order is sought and obtained, any disclaimed property which is not determined by

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Latest Restructuring & Insolvency News

Insolvency Service reports 11-year director ban for BBL fraud

The Insolvency Service has reported the disqualification of building contractor Tahir Haq from serving as a company director for 11 years, accompanied by mandated compensation payments totalling £58,963 (including interest and costs). Haq obtained a £50,000 bounce back loan (BBL) for Integral Maintenance Team Ltd by overstating his company's turnover by £200,000, despite the company being entitled to only around £3,000. The disqualification, effective from 1 July 2025, prohibits Haq from promoting, forming, or managing any company without prior court approval.

Disputed debt and conversion of members’ voluntary liquidation to creditors’ voluntary liquidation (Noal SCSp and others v Novalpina Capital LLP (in members voluntary liquidation) and others)

Restructuring & Insolvency analysis: This judgment confirms that, if a company in members’ voluntary liquidation (MVL) is unable to pay its debts in full together with interest at the official rate within the period stated in the directors’ declaration made under section 89 of the Insolvency Act 1986 (IA 1986), then the company must be placed into creditors’ voluntary liquidation (CVL). There is no solvency test to justify varying this period. The company is already in liquidation and the liquidator has no discretion with regard to having to act under IA 1986, s 95 to convert the MVL to a CVL. Written by Andrew Mace, barrister at Tanfield Chambers.

Issue 168 of Insolvency Service’s Dear IP published

The Insolvency Service reports that the Information Sharing (Disclosure by the Registrar) Regulations 2024 (SI 2024/1378), effective from 20 December 2024, will enable the Registrar of Companies to disclose non-public information to insolvency practitioners (IPs) and The Financial Conduct Authority has published updated guidance (FG25/2) for IPs handling regulated firms, incorporating Consumer Duty requirements. Following the Pindar Scarborough Ltd (in Administration) [2024] EWHC 908 and Boughey & Anor v Toogood International Transport and Agricultural Service Ltd (in administration) [2024] EWHC 1425 court judgments, the Insolvency Service has revised its interpretation of 'creditor' status in terms of the Insolvency Act 1986 (IA 1986), adopting a context-specific approach rather than maintaining its previous fixed-point definition.

The Supreme Court tweaks Etridge (Waller Edwards v One Savings Bank plc)

Property Disputes analysis: English property law periodically produces epoch-making decisions of the highest court. In years to come, Waller Edwards v One Savings Bank plc may well become such a decision. It enjoys the respectable jurisprudential lineage of three famous House of Lords’ decisions: Barclays Bank v O’Brien, CIBC Mortgages v Pitt, and Royal Bank of Scotland v Etridge, but it also applies established principles in a novel way. Written by Marc Beaumont, Windsor Chambers.

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