UK Liquidator on the hook for £500,000

In a recent case before the High Court, Judge Simon Barker QC found favour with the Claimants, Top Brand Services Limited and Lemione Services Limited that UK Liquidator, Mrs Gagen Sharma either repay, restore, account or pay compensation to to the company of which she was a former Liquidator, namely Mama Milla Limited (In Liquidation).

Court proceedings were brought pursuant to section 212 of the Insolvency Act 1986 which provides for the following –

(1)This section applies if in the course of the winding up of a company it appears that a person who—

(a)is or has been an officer of the company,

(b)has acted as liquidator F1. . . or administrative receiver of the company, or

(c)not being a person falling within paragraph (a) or (b), is or has been concerned, or has taken part, in the promotion, formation or management of the company,

has misapplied or retained, or become accountable for, any money or other property of the company, or been guilty of any misfeasance or breach of any fiduciary or other duty in relation to the company.

Counsel for the Creditors characterised Mrs Sharma’s fulfilment of her duties as “slipshod and slapdash” and her approach as “being geared towards bringing about a quick conclusion to the liquidation”.

In coming to its conclusion the Court was satisfied that Mrs Sharma had acted in breach of her duty and negligently.

This case shows that errant Liquidators can and will be held to account by the Courts.