The High Court has recently considered whether provisional liquidators had the power to sell a company's business and assets and if not could be granted retrospective approval for the sale.
Background
The court heard two applications: a winding-up petition against Versilia Solutions Ltd, a buy-on-board airline services provider, and a request to ratify a sale of most of the company's business and assets carried out by its joint provisional liquidators (JPLs).
The judge considered whether it could retrospectively grant the JPLs a power to sell the business and assets had that not been included in their functions and powers in the order appointing them.
Decision
The judge held first that the JPLs did in fact have the power to sell the assets under their appointment order. As the company had effectively ceased trading and liquidation was inevitable, converting rapidly deteriorating assets into cash was properly characterised as "protecting and securing" them rather than parting with them.
The judge went on to say that even if this determination was wrong, he would have ratified the sale retrospectively. The court has jurisdiction to confirm and ratify the acts of a properly appointed provisional liquidator acting beyond the functions conferred upon appointment. Finally, the judge wound the company up.
Key takeaways
- The judge warned that the judgment should not be seen as "carte blanche" for provisional liquidators to sell the business and assets of a company nor a "green light" to carry out sales without the court having granted the functions and powers in advance, whether this be at the point of their appointment or by an urgent application to extend those powers.
- Where a sale of assets is a foreseeable outcome, those seeking a JPL appointment should apply for an express power of sale at the outset.
Aerovías Del Continente Americano S.A. v Versilia Solutions Ltd (in provisional liquidation) (acting by Michael Leeds and Kristina Kicks as joint provisional liquidators) [2026] EWHC 282 (Ch)
Find out more
To discuss the issues raised in this article in more detail, please contact a member of our
Restructuring and Insolvency team.
