Liquidator’s Duty to Fish and Investigate

Do not take my word for it but consider the following persuasive authorities on the subject of the obligations of a Liquidator (or Administrator) to investigate: “…to do everything within his power to realise assets for the creditors, for instance by taking misfeasance proceedings, wrongful/fraudulent trading proceedings and investigating transactions which can be attacked as preferences, transactions at an undervalue and floating charges which may be avoided.” Bailey and Groves “Corporate Insolvency” (Third Edition) “A liquidator’s duty is to investigate the affairs of the Company…” Walker Morris v Khalastchi [2001] 1 B.C.L.C.) “. . . it is quite clear that the purposes of the administration must include the gathering of information as to the conduct of the affairs of the company and those responsible for it by an administrator in order that he can report to the Secretary of State as he is required to do. He must do so in order that the Secretary of State can perform his duty, which is the important one of taking proceedings if it appears that a disqualification order should be made.” Re Polly Peck International plc, Ex p the joint administrators [1994] BCC “Given there is a duty on these liquidators to get the money in, there was a duty to investigate what money could be got in.” A & J Fabrications Ltd v Grant Thornton [1998] 2 BCLC 227

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