(1)The expenses of winding up in England and Wales, so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over any claims to property comprised in or subject to any floating charge created by the company and shall be paid out of any such property accordingly.
(2)In subsection (1)—
(a)the reference to assets of the company available for payment of general creditors does not include any amount made available under section 176A(2)(a);
(b)the reference to claims to property comprised in or subject to a floating charge is to the claims of—
(i)the holders of debentures secured by, or holders of, the floating charge, and
(ii)any preferential creditors entitled to be paid out of that property in priority to them.
(3)Provision may be made by rules restricting the application of subsection (1), in such circumstances as may be prescribed, to expenses authorised or approved—
(a)by the holders of debentures secured by, or holders of, the floating charge and by any preferential creditors entitled to be paid in priority to them, or
(b)by the court.
(4)References in this section to the expenses of the winding up are to all expenses properly incurred in the winding up, including the remuneration of the liquidator.
Cases considering section 176ZA 5
[2024] EWHC 3047 (Ch) · 28 November 2024Limits
Applies the statutory priority of liquidation expenses, including remuneration, over floating-charge claims where free assets are insufficient. (see para [37])
Confirms restrictions on payment of litigation expenses from floating-charge property unless authorised or approved by relevant economic stakeholders or the court. (see para [38])
Confirms that liquidator remuneration is included within the liquidation expenses given priority under section 176ZA(1). (see para [37])
[2022] EWHC 1877 (Ch) · 19 July 2022
Shows that Parliament created an express power for floating-charge property to fund general winding-up expenses, reinforcing that courts should not fill comparable gaps in the safeguarding regulations. (see para [35])
[2015] EWHC 3568 (Ch) · 11 December 2015Interprets
The judgment explains that section 176ZA reverses the floating-charge priority rule in <span class="cite_name">Re Leyland DAF Ltd, Buchler v Talbot</span>, but permits the reversal to be restricted by rules made under subsection (3). (see paras [17]–[20])
The provision is applied as establishing priority for winding-up expenses over claims to floating-charge property where assets available to general creditors are insufficient. Its operation remains subject to restrictions in the rules. (see paras [19]–[22])
The judgment treats subsection (3) as authorising rules that restrict the application of the priority in subsection (1) to expenses approved or authorised by the creditor or the court. (see paras [19]–[20])
The provision is noted as defining winding-up expenses broadly to include all expenses properly incurred in the winding up, including the liquidator’s remuneration. (see para [19])
What each judgment says about section 176ZA is in the case-law panel in the full Act.