Just a quick reminder that under section 84 of the Insolvency Act 1986, where a company has given a Qualifying Floating Charge (QFC), ie one created on or after 15 September 2003, it is necessary to give notice of the proposed resolution to wind up to a QFC Holder (QFCH). A resolution to wind up can only be validly passed if the QFCH specifically has consented in writing, or once 5 business days have elapsed, beginning with the day on which the written notice was given. This then gives the QFCH chance to appoint an administrator if they so wish.
We have seen a number of instances where notice of the resolution to wind up has not been given to a QFCH. This potentially invalidates the winding up resolution and hence the appointment of the liquidator. The liquidator could also be exposed to an action by a disgruntled director or minority shareholder. Whilst section 232 states that the acts of a liquidator are valid notwithstanding any defect in his appointment, it is not a good idea to have to rely on this section. In addition, I do not think that it would act as a defence to any action for negligence brought by the instructing directors/shareholders against the IP in his capacity as advising member.
