Liquidator's sweeping application for information struck down by English Court

The English High Court has emphasised the need for insolvency officeholders to show that they reasonably require any information and/or documents sought in order to carry out their duties. 

Background

Liquidators were appointed to Eversholt Rail 365 Ltd (Eversholt365). Eversholt Rail Limited (Eversholt Rail) was part of the same group and held all of  Eversholt365's documentation. 

The liquidators had received documents from Eversholt Rail but continued to make extensive requests for documentation from both Eversholt Rail and its lawyers. In their application to the court, the liquidators broadly described and sought disclosure and delivery up of all documents related to Eversholt365's business.

Decision

In dismissing the application, Judge Burton emphasised that the insolvency legislation does not entitle officeholders to every document relating to the insolvent company. There is a clear requirement on the practitioner to outline why they reasonably require the documents to enable them to perform their duties. The judge also emphasised the levels of cooperation which Eversholt Rail and its lawyers had already provided to the liquidators.

This judgment acts as a warning to insolvency practitioners to not cast an unreasonably wide net when requesting documents and to demonstrate why documents are reasonably required. 

Find out more

To discuss the issues raised in this article in more detail, please contact a member of our Restructuring & Insolvency team.

Webb & Anor v Eversholt Rail Ltd & Anor (Re Eversholt Rail (365) Ltd - Insolvency Act 1986) [2024] EWHC 2217 (Ch)