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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

26 AUG 2013

Re Danka Business Systems plc (In Members’ Voluntary Liquidation) [2013] EWCA Civ 92; [2013] BPIR 432

(Court of Appeal, Mummery, Patten and Treacy LJJ, 19 February 2013)

A company was in a solvent members' voluntary liquidation. It had sold its business to the appellants, on terms that it would indemnify the appellants against various pre-acquisition tax liabilities which might later arise. HHJ Pelling QC (sitting as a judge of the High Court) dismissed the appellants' application to delay the liquidators' distribution and for the liquidators to set aside a greater reserve for the contingent claims. The Court of Appeal dismissed the appellants' appeal. Under r.4.86 of the Insolvency Rules 1986, the liquidators had valued the appellants' proof, and it was not appropriate to delay the distribution after they had done so. As regards the reserve, the liquidators had conducted a fair assessment of the contingency and they were not required to wait and see if the contingency occurred.

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