If you are a creditor of an insolvent company or a bankruptcy, Oliver Elliot can help you address your concerns arising from the insolvency and section 234 of the insolvency act 1986 can help.
How can a Liquidator use Section 234 of the Insolvency Act 1986 to get in company records to investigate a company’s financial affairs?
Section 234 of the Insolvency Act 1986 is the Section that enables an Insolvency Practitioner to demand delivery up of property belonging to the insolvent company when acting as Liquidator and or Administrator. Sections 234, 235 and 236 of the Insolvency Act 1986 are all interlinked.
Section 234 of the Insolvency Act 1986 can be used by the Insolvency Practitioner to demand property from anyone having the insolvent company’s (one applicable to Liquidation or Administration in this scenario) assets and or documents such as its books, papers and records which would be relevant to the insolvent company’s financial affairs. The Section has mandatory characteristics because it would be unusual for the Insolvency Practitioner to be unable to take into his or her possession all and any property of the insolvent company.
Getting in the company’s property.
(1)This section applies in the case of a company where—
(a)the company enters administration,
(b)an administrative receiver is appointed, or
(c)the company goes into liquidation, or
(d)a provisional liquidator is appointed;
and “the office-holder” means the administrator, the administrative receiver, the liquidator or the provisional liquidator, as the case may be.
(2)Where any person has in his possession or control any property, books, papers or records to which the company appears to be entitled, the court may require that person forthwith (or within such period as the court may direct) to pay, deliver, convey, surrender or transfer the property, books, papers or records to the office-holder.
(3)Where the office-holder—
(a)seizes or disposes of any property which is not property of the company, and
(b)at the time of seizure or disposal believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the court or otherwise) to seize or dispose of that property,
the next subsection has effect.
(4)In that case the office-holder—
(a)is not liable to any person in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by the office-holder’s own negligence, and
(b)has a lien on the property, or the proceeds of its sale, for such expenses as were incurred in connection with the seizure or disposal.
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