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Back from the Grave - Company Restoration - A novel point in Court of Session - 4th February 2015 - Click for larger version Back from the Grave - Company Restoration - A novel point in Court of Session - 4th February 2015

Acting for proposed liquidators of a dissolved company (“the Company”) with an outstanding Interest Rate Hedging Product (“IRHP”) claim, Macdonald Henderson has successfully presented an application to the Court of Session to have the Company restored to the Register of Companies so that the IHRP compensation can be ingathered for the benefit of creditors.

The Company had been wound-up and so far as the liquidators were previously aware all of the Company’s assets ingathered. At the conclusion of the liquidation, the liquidators had been released from their position as liquidators and the Company had been dissolved, in the usual course of matters.

However, around 18 months later, it came to light that the Company had an outstanding claim against a bank in relation to a mis-sold IRHP.

The Company required to be restored to the Register of Companies and liquidators-re-appointed so that the compensation claim could be dealt with and realised.

The particularly novel point was that the liquidators who now sought to be appointed were not previously the liquidators, prior to the Company being dissolved.

The Companies Act specifically allows for a former liquidator to apply for the restoration of a company. A newly proposed liquidator, however, is not specifically allowed to apply.

Notwithstanding that our clients had not previously been liquidators, we were able to satisfy the Court that our clients were entitled to apply for the Company’s restoration and to then be appointed by the Court as liquidators.

The effect of a company being restored to the Register is that it is deemed to have continued in existence as if it had not been dissolved in the first place. While the Company had in fact been dissolved for around 18 months, it would now be treated as if the Company and its liquidation had continued for those 18 months. A liquidator has a number of tasks which regularly require to be completed. Since the company was dissolved, none of those tasks had of naturally been completed in the succeeding 18 months – but now required to be. The Court were also satisfied to waive the failure (through no fault of anyone) to complete those tasks and allow the tasks to be completed late.

The Company was restored to the register, our clients were successfully appointed as new liquidators, and are now able to get on with completing the Company’s IRHP claim.

If you would like to discuss matters relating to this topic or corporate recovery generally, please contact Alan McKee (alan@macdonaldhenderson.co.uk) or Michael Hankinson (michael@macdonaldhenderson.co.uk).

Last updated: 9.26am, Wednesday 4th February 2015

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