Subject to the provisions of this Act as to preferential payments, the company’s property in a voluntary winding up shall on the winding up be applied in satisfaction of the company’s liabilities pari passu and, subject to that application, shall (unless the articles otherwise provide) be distributed among the members according to their rights and interests in the company.
Definitions used in section 107 2
- 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- articles
“articles”, in relation to a company (see section 18 of the Companies Act 2006 );
Defined in s.436(2) · see it in the full Act
Cases considering section 107 33
Belmont Park Investments PTY Limited v BNY Corporate Trustee Services Limited and Lehman Brothers Special Financing Inc
Confirms the mandatory pari passu application of company property in a voluntary winding up, which parties cannot contractually displace. (see paras [6]-[8])
McGrath and another (Appellants) and others v Riddell and others (Respondents) McGrath and another and others (Appellants) v Riddell and others (Respondents) (Conjoined Appeals)
The provision supplies the English pari passu distribution baseline. The House held that it did not prevent assistance under section 426 which resulted in distribution according to a different Australian priority regime. (see paras [2]; [13]; [26])
Sharma v Top Brands Ltd & Ors
The Court relied on the statutory policy requiring company property to be applied to liabilities pari passu. That policy supported requiring the liquidator properly to collect and distribute the company’s assets. (see para [54])
- The Joint Administrators of LB Holdings Intermediate 2 Ltd v Lehman Brothers Holdings Inc
- Ricoh Europe Holdings BV & Ors v Spratt & Anor
- Perpetual Trustee Company Ltd & Anor v BNY Corporate Trustee Services Ltd & Ors
- Financial Services Compensation Scheme Ltd v Larnell (Insurances) Ltd
- Glencore Energy UK Ltd v Prax Lindsey Oil Refinery Limited (in liquidation)
- In the matter of Torotrak Plc (in liquidation)
- Secretary of State for Business, Energy and Industrial Strategy v PAG Asset Preservation Ltd
- CJ and RA Eade LLP, Re
- Qureshi v Association Of Conservative Clubs Ltd (On Refusal of Permission to Appeal)
- Qureshi v Association Of Conservative Clubs Ltd (On Costs)
- Qureshi (Liquidator of Edgware Constitutional Club Ltd) v Association of Conservative Clubs Ltd
- Warwick & Anor (Joint Liquidators)
- Top Brands Ltd & Ors v Sharma & Ors
- Heis & Ors (Administrators of MF Global UK Ltd.) v MF Global Inc
- Courts Plc (In Liquidation)
- Sevilleja v Marex Financial Ltd
- The Joint Administrators of LB Holdings Intermediate 2 Limited v The Joint Administrators of Lehman Brothers International (Europe) and others
13 more judgments, and what each says about section 107, are in the case-law panel in the full Act.
Amendments and notes
2 notes from legislation.gov.uk
Modifications
- C300S. 107 restricted (6.3.2008) by The Regulated Covered Bonds Regulations 2008 (S.I. 2008/346), reg. 46, Sch. para. 2(2)
- C301S. 107 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 15 (with regs. 1(2), 3(a)(ii))