Administration Orders and Voluntary Liquidation

In Re Norditrack (UK) Ltd (Ch D TLR 11 November)

For the purposes of ss238 and 239 of the Insolvency Act 1986 the onset of insolvency must be the date of discharge of the administration order rather than the date of commencement of voluntary liquidation. To achieve this it is necessary that the voluntary winding-up should commence immediately on the discharge of the administration order. However, s86 provides that a voluntary winding-up is deemed to commence at the time of the passing of the resolution for voluntary winding-up, which precludes a resolution for voluntary winding up being passed conditional on the court making an order for discharge of the administration order. The resolution takes effect, as the Act provided, at the time when it was actually passed. The right course is to make an order for discharge of the administration order on the basis that it would take effect at the time proposed for the Extraordinary General Meeting of the company to consider voluntary liquidation, but that the order should lie in the office until the solicitors for the administrators lodged with the court the draft order together with a certificate that the resolution for voluntary winding up had been duly passed at the meeting.