Insolvency Act 1986, section 246ZD

Power to assign

Part VI Miscellaneous Provisions Applying to Companies Which are Insolvent or in Liquidation

(1)This section applies in the case of a company where—

(a)the company enters administration, or

(b)the company goes into liquidation;

and “the office-holder” means the administrator or the liquidator, as the case may be.

(2)The office-holder may assign a right of action (including the proceeds of an action) arising under [F536 or by virtue ofF536] any of the following—

[F537 (za)section A43 (challenges to monitor remuneration in subsequent insolvency proceedings);F537]

(a)section 213 or 246ZA (fraudulent trading);

(b)section 214 or 246ZB (wrongful trading);

(c)section 238 (transactions at an undervalue (England and Wales));

(d)section 239 (preferences (England and Wales));

(e)section 242 (gratuitous alienations (Scotland));

(f)section 243 (unfair preferences (Scotland));

(g)section 244 (extortionate credit transactions).F535]

Definitions used in section 246ZD 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
enters administration

(b) a company “enters administration” when the appointment of an administrator takes effect,

Defined in Sch.B1 para.1(2) · see it in the full Act
administrator

1 (1) For the purposes of this Act “administrator” of a company means a person appointed under this Schedule to manage the company’s affairs, business and property.

Defined in Sch.B1 para.1(1) · see it in the full Act

Cases considering section 246ZD 7

Asertis Limited & Anor v Sean Adrian Melhuish & Ors

[2024] EWHC 2819 (Ch) · 7 November 2024Interprets

Interprets section 246 ZD as giving an office-holder an option to realise an insolvency cause of action by assignment. Its purpose does not extend to making confidential information freely available, but effective assignment may justify controlled disclosure supporting the estate (see paras [42]-[49]).

Manolete Partners PLC v Norman Freed & Ors

[2024] EWHC 2242 (Ch) · 30 August 2024

Section 246ZD was considered as part of the legislative scheme permitting office-holders to assign insolvency causes of action and their proceeds. The scheme supported refusing a cap that would frustrate the practical utility of assignment (see paras [136]-[138]).

Transworld Payment Solutions U.K. Limited & Anor. v First Curaçao International Bank N.V. & Anor.

[2022] EWHC 2742 (Ch) · 31 October 2022Interprets

The court held that section 246ZD permits assignment of office-holder rights of action only within the temporal scope fixed by the transitional provisions. It did not apply to companies liquidated before 1 October 2015. (see paras [164], [170]-[175])

What each judgment says about section 246ZD is in the case-law panel in the full Act.

Amendments and notes

9 notes from legislation.gov.uk

Amendments

  1. F536Words in s. 246ZD(2) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 16(a) (with ss. 2(2), 5(2))
  2. F537S. 246ZD(2)(za) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 16(b) (with ss. 2(2), 5(2))
  3. F535S. 246ZD and cross-heading inserted (1.10.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 118, 164(1); S.I. 2015/1689, reg. 2(j) (with Sch. para. 16)

Modifications

  1. C858Ss. 246ZA-246ZD applied (with modifications) by 2009 c. 1, s. 145 Table 2 (as amended) (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(10)
  2. C864S. 246ZD applied (with modifications) by 2009 c. 1, s. 103 (as amended) (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(4)
  3. C865S. 246ZD applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)
  4. C866S. 246ZD applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)
  5. C867S. 246ZD applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)
  6. C868S. 246ZD applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)