Insolvency Act 1986, Schedule 4, paragraph 3

SCHEDULE 4 Powers of Liquidator in a Winding Up

3 F1433 ... power to compromise, on such terms as may be agreed—

(a) all calls and liabilities to calls, all debts and liabilities capable of resulting in debts, and all claims (present or future, certain or contingent, ascertained or sounding only in damages) subsisting or supposed to subsist between the company and a contributory or alleged contributory or other debtor or person apprehending liability to the company, and

(b) all questions in any way relating to or affecting the assets or the winding up of the company,

and take any security for the discharge of any such call, debt, liability or claim and give a complete discharge in respect of it.

Definitions used in Schedule 4, paragraph 3 3

the company

2 Section 233B does not apply in relation to a contract for the supply of goods or services to a company (“the company”) where any of paragraphs 3 to 11 applies.

Defined in Sch.4ZZA para.2 · see it in the full Act
contributory

(1) In this Act . . . the expression “contributory” means every person liable to contribute to the assets of a company in the event of its being wound up, and for the purposes of all proceedings for determining, and all proceedings prior to the final determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory.

Defined in s.79(1) · see it in the full Act
the debtor

(2) In Schedule 6 “the debtor” means the company or the individual concerned.

Defined in s.386(2) · see it in the full Act

Cases considering Schedule 4, paragraph 3 4

Whitehouse v Wilson & Anor

[2006] EWCA Civ 1688 · 7 December 2006

Applies the power to compromise, on agreed terms, questions relating to or affecting company assets to the proposed assignment and settlement of claims. (see paras [18]; [24]; [36])

Mahomed & Anor v Morris & Ors

[2000] EWCA Civ 46 · 17 February 2000

The paragraph formed part of the statutory powers to compromise claims against the company or questions affecting company assets. The liquidation committee sanctioned the liquidators’ exercise of the relevant compromise power (see para [36]).

TayTime Limited v Secretary of State for Levelling Up, Housing and Communities & Ors

[2024] EWHC 1053 (Admin) · 7 May 2024Defines

Identifies the liquidator’s power to compromise questions relating to company assets or the winding up (see para [78]).

What each judgment says about Schedule 4, paragraph 3 is in the case-law panel in the full Act.

Amendments and notes

1 notes from legislation.gov.uk

Amendments

  1. F1433Words in Sch. 4 para. 3 omitted (26.5.2015) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 120(6)(a), 164(3)(i)(i)