Aerovías Del Continente Americano SA Avianca & Ors v Versilia Solutions Limited (in Provisional Liquidation) [2026] EWHC 282 (Ch)

[2026] EWHC 282 (Ch)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

INSOLVENCY AND COMPANIES LIST (ChD)

Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NL

Before

DEPUTY HIGH COURT JUDGE LANCE ASHWORTH KC

IN THE MATTER OF VERSILIA SOLUTIONS LIMITED

AND IN THE MATTER OF THE INSOLVENCY ACT 1986

AND IN THE MATTER OF THE INSOLVENCY (ENGLAND AND WALES) RULES 2016

B E T W E E N:

Between

AEROVÍAS DEL CONTINENTE AMERICANO S.A. AVIANCAPetitioner

TACA INTERNATIONAL AIRLINES S.A.Petitioner

AVIANCA COSTA RICA S.A.Petitioner

AVIANCA ECUADOR S.A.Petitioner

AVIATECA S.A.Petitioner

VERSILIA SOLUTIONS LIMITED (In Provisional Liquidation)Respondent

(Acting by Michael Leeds and Kristina Kicks as Joint Provisional Liquidators)Respondent

ON THE APPLICATION OF:

Between

MICHAEL LEEDS (2) KRISTINA KICKS (in their capacity as Provisional Liquidators of Versilia Solutions Ltd)

Provisional Liquidators

Steven Thompson KC (instructed by Hausfeld & Co LLP) for Petitioners

Kate Rogers (instructed by Crowell & Moring UK LLP) for Defendants

Hearing Hearing date: 9 th February 2026

Draft Judgment circulated: 10 th February 2026

Judgment: 12 th February 2026

APPROVED JUDGMENT

Date 2026-02-12

[1]At the hearing on 9 February 2026, I had before me two applications:(a) The “Winding Up Application” for an order that Versilia Solutions Ltd (“the Company”) be wound up on the petition presented by Aerovias del Continente Americano SA Avianca and others (“the Petitioners”); and

(b) The “Ratification Application” for an order ratifying the sale by the Joint Provisional Liquidators of the Company, Michael Leeds and Kristina Kicks, (“the JPLs”) of the Company’s business and assets on 19 December 2025 such that the sale was not considered outside of the JPL’s powers granted to them upon appointment.

[2]The Petitioners were represented by Mr Steven Thompson KC on the Winding Up Application and the JPLs were represented by Ms Kate Rogers on the Ratification Application. There were no other appearances either by supporting or opposing creditors or by the directors or shareholders of the Company. Accordingly, the applications were not opposed.

[3]I heard the Winding Up Application first and then the Ratification Application. I announced at the conclusion of the hearing that first, I would grant the Ratification Application albeit not in the form sought, which I did at 12.10 pm and then second, I would order the Company to be wound up at 12.12 pm. I said I would provide my reasons in writing, those in respect of the Ratification Application potentially being of some more general interest to people advising in the sphere of insolvency work. These are my reasons.

Background

[4]There was no real contest as to the background, which for the purposes of this Judgment I can set out as follows.

[5]The Company was incorporated on 6 April 2016 under the Companies Act 2006 and operates in the airline industry as the provider of buy-onboard services.

[6]Following the service of a statutory demand on the Company in early July 2025 for invoice debts (of some US$1,592,397), the Petition was presented on 4 September 2025, supported and verified by the 1st witness statement of Mr Edmund Charles Beale, a solicitor and partner at the firm of Hausfeld & Co LLP acting then as now for the Petitioners.

[7]At the time of presentation of the Petition, the statutory demand had been only partially satisfied: some US$765,307 remained outstanding at the time of presentation of the Petition – that was the Petition debt.

[8]The Company’s registered office and centre of main interest is Northampton.

[9]The Petition was served on the Company on 12 September 2025 and listed to be heard on 29 October 2025.

[10]On 18 September 2025 the Company applied for an interim injunction to restrain advertisement of the Petition (“the Injunction Application”). On 19 September 2025 ICC Judge Prentis granted the application on a without notice basis and set a return date of 17 October 2025. The parties agreed to vacate that return date until the first open date after 30 October 2025; the hearing of the Petition itself was similarly adjourned.

[11]When a new return date was sought from the listing office, no date was available until July 2026. The Petitioners considered this too long to wait for an inter partes hearing of this nature, especially given that the Company had not sought a validation order. The Petitioners sought (by “the Expedition Application”) and obtained from Edwin Johnson J on 21 November 2025 an orderfor expedition of the return date. The hearing on 9 February 2026 was then listed as the return date of the Company’s application to restrain advertisement of the Petition.

[12]On 25 November 2025 (the next working day but one after the order for expedition), the directors of the Company applied (by “theAdministration Application”) to put it into administration, with a ‘pre-pack’ sale of most of its valuable assets to a connected party. That application was listed to be heard on 4 December 2025 but, due to congestion in Court, had to be relisted for 10 December 2025, when it came on with the Petition itself.

[13]On 9 December 2025, the Petitioners applied for the appointment of the JPLs (“thePL Application”). The grounds on which the PL Application was made are set out in the Third Witness Statement of Edmund Charles Beale dated 9 December 2025, which include following:(a) The financial position of the Company had deteriorated to such an extent that liquidation was inevitable (the Petition debt was admitted by the Company and the directors had admitted insolvency);

(b) The Company was expected to run out of cash in the week commencing 1 December 2025;

(c) Suppliers had been placed onto payment plans, absent which, the Company’s ability to deliver services was likely to be immediately impacted;

(d) The Company had guaranteed a loan taken out by the group holding company, and the guarantee was imminently due to be called upon.

[14]There was nothing in Mr Beale’s witness statement suggesting that the JPLs would be seeking to sell the business and assets of the Company or any part of them.

[15]On 9 December 2025 by email sent at 18:23, the solicitors for the directors of the Company wrote to the Petitioners’ solicitors saying, among other matters, that “…the company has now effectively ceased trading following termination of its main contracts”.

[16]At the hearing on 10 December 2025, the directors and the Company expressly acknowledged the Petition debt and HHJ Klein, sitting as a Judge of the High Court, made an order (“the 10 December Order”) which:(a) (by consent) dismissed the Administration Application (§1);

(b) (by consent) discharged the ex parte injunction and dismissed the Injunction Application (§2);

(d) (without objection from the Company) appointed the JPLs pursuant to section 135 of the Insolvency Act 1986 (“IA1986”) until the final determination of the Petition or further order of the Court, with various standard powers (§§5-10), to which I will return in greater detail below;

(e) adjourned the hearing of the Petition to today (§11); and

(f) on costs, again by consent, the learned Judge ordered (by §12) that “the Petitioners’ costs of the Injunction and Expedition Applications, of the JPL Application and of the Administration Application…be paid out of the assets of the Company as expenses of the provisional liquidation and/or liquidation”. He reserved the Petitioners’ costs of the Petition to this hearing of the Petition (also by §12).

[17]On 11 December 2025 the JPLs received an offer to acquire certain aspects of the Company’s business and certain assets of the Company (as detailed at paragraph 3 of that offer) for the sum of £70,000 in total, from Altura Service Limited (“theAltura Offer”). The Altura Offer had a deadline of 16 December 2025 for acceptance.

[18]On 12 December 2025, the JPLs received notice from one of the Company’s main customers, Volotea S.L., that it had served a termination notice on the Company on 11 December 2025.

[19]On 15 December 2025, the Company’s management made an urgent request for payment of $41,000 to the Chilean subsidiary of the Company, as the funds were needed to part settle an outstanding balance of c.$192,000 to Gate Gourmet Catering Chile Ltd, who were threatening to stop services in respect of one of the remaining contracts absent payment.

[20]On 16 December 2025 the JPLs received an offer from Volotea S.L. to acquire the EPOS terminals held by the Company under the Volotea Retail Management Services Agreement dated 28 July 2022, for the sum of €30,000.

[21]The JPLs appointed Gordon Brothers Asset Ingenuity Ltd (“Gordon Brothers”) to provide a valuation of the Company and its assets and to advise on the offers received by the Company. The advice received from Gordon Brothers dated 18 December 2025 was, among other matters, that(1) the Altura offer was the best received to date,

(2) that offer far exceeded Gordon Brothers' Ex-Situ valuation for the plant and machinery and stock and reduced the associated costs of sale in an Ex-Situ disposal scenario, which would include repatriation/courier costs of assets overseas and nationally, data wiping costs, storage costs, time costs, sales commissions, marketing costs, etc.

(3) they were not of the view that any better offer would be achieved if the JPLs continued to market the business and assets, particularly in light of the fact that the proposed administrators, Mazars, had already conducted a marketing process which had elicited 11 offers, the highest of which was also £70,000 but which included the sales ledger, which was carved out of the Altura offer, which Gordon Brothers said demonstrated "a stronger revised offer which will likely result in a better net realisation for the creditors of the Company",

(4) conducting further marketing of the business and assets would also incur further costs and prolonging any sale would likely further deteriorate the business and could have a negative effect on the overall net realisation,

(5) the majority of the UK staff would TUPE transfer to the purchaser, which would significantly improve the creditor position. They concluded that the Altura Offer would “present the best net realisation available under the circumstances” and would “limit any further costs”. They recommended acceptance of the offer presented.

[22]On 19 December 2025, the JPLs received notice from Aviapartner Lille that it had served notice to terminate its contract with the Company on 16 December 2025.

[23]The JPLs, for the reasons set out in detail in the witness statement of Mr Leeds dated 29 January 2026 (at paragraph 19), determined that acceptance of the Altura Offer provided the best means of preserving/obtaining value in the Company’s business and assets. Accordingly, on 19 December 2025, the JPLs proceeded with the sale in accordance with the Altura Offer (“theSale”). The Sale expressly excluded Company debtors; intercompany balances; and the majority of the Company’s interests in overseas subsidiaries.

[24]The JPLs did not make any application to Court in advance of the Sale either for confirmation that the powers granted to them in the 10 December Order covered them causing the Company to enter into the Sale, nor seeking to extend their powers in this respect.

[25]The Petition was duly advertised on 19 December 2025.

[26]Since advertisement, only one other creditor has contacted the Petitioners’ solicitors, who passed on the JPLs’ contact details. They did not contact the JPLs, nor have they taken any part in this application. There has been no further contact between the directors and the Petitioners.

[27]On 30 January 2026 the JPLs made the Ratification Application supported by the witness statement dated 29 January 2026 from Michael Leeds, one of the JPLs.

[28]I determined that I should decide the Ratification Application first on the basis that if I made a winding up order in respect of the Company first, there might be issues as to whether the JPLs (who would automatically cease to be in office upon the making up of a winding up order) would have jurisdiction to press the Ratification Application and/or whether the JPLs would be entitled to assert a charge in respect of their costs and expenses over the assets of the Company if an order were made on the Ratification Application after they had ceased to be in office. Mr Thompson and Ms Rogers agreed with this course.

The Ratification Application

[29]The power to appoint a provisional liquidator is in section 135 IA 1986. It is an interim power, in theory, not intended to prejudge the merits of the winding up petition, assuming there is an arguable defence on the merits, but rather to protect the position pending the hearing and in particular to avoid dissipation of assets, which may be required in the liquidation. But it is a draconian power, since very often the practical effect of the appointment of a provisional liquidator is to kill the business straightaway, without any potential for redress if the petition proves unfounded, especially in situations where the provisional liquidator is appointed on the application of the Secretary of State who is not required to give any undertaking in damages (Re Forrester & Lamego Ltd

[1997] 2 BCLC 155

at 158f-h).

[30]Section 135(5) of IA 1986 provides that where a liquidator is provisionally appointed by the Court, his powers may be limited by the order appointing him. As is set out in McPherson & Keay’s Law of Company Liquidation 5th edn. at paragraph 6-018, the Court has a discretion as to the form of the order it makes.

[31]Etherton J (as he then was) in Ashborder BV v. Green Gas Power Ltd.

[2005] EWHC 1031 (Ch)

said at [86]:

“Provisional liquidators are, as the name indicates appointed provisionally, pending the hearing of the winding up petition. They are not liquidators following a winding up order, seeking to realise the assets of the company for the best value they can reasonably obtain.”

[32]This must, necessarily, be subject to the express terms of the powers granted to a provisional liquidator by the Court’s order and the facts of the particular case. In that case the powers granted to the provisional liquidators included a power to sell or otherwise dispose of the property of the companies, but nonetheless Etherton J restrained them from selling causes of action to the petitioning creditor, as those causes of action would have been relied on by the companies in order to defeat the winding up petition.

[33]As stated above, the relief sought in the Ratification Application was that the Sale be ratified by the Court such that the Sale was not considered outside of the JPL’s powers granted to them upon appointment. This presupposed that the Sale was not already permitted by the powers granted to the JPLs in the 10 December Order.

[34]Paragraphs 6 to 10 of the 10 December Order were as follows (with emphasis added):

“6. The Provisional Liquidators’ functions and powers shall extend to the following: (a) to locate, protect, secure, take possession of, collect and get in all property or assets (of whatever nature) to which the Company is or appears to be entitled in this country or abroad, including assets in the possession of a third party, such assets and property not to be distributed or parted with by the Provisional Liquidators until further order except pursuant to the functions hereby conferred; (b) to enter upon any premises held out and/or utilised by the Company as a registered office and/or as a trading address; (c) to locate, protect, secure, take possession of, collect and get in the books, papers and records of the Company including the accounting and statutory records, whether such books, papers and records are held in this country or abroad and whether in the possession of or under the control of the Company or a third party; (d) to investigate the affairs of the Company insofar as it is necessary to protect the assets of the Company (including any third party or trust assets in the possession of or under the control of the Company), and for this purpose the Provisional Liquidators shall have all the powers given to the Official Receiver by section 131 of the Insolvency Act 1986 to require a statement of affairs to be made; (e) without prejudice to the generality of the foregoing, to investigate insofar as it is considered necessary (with a view to tracing and protecting the assets of the Company) any transactions entered into by the Company and/or any dispositions made by the Company which may have resulted in and/or involved the dissipation and/or reduction in value of all or any of the Company assets or which in the event that a winding-up order is made may be avoidable and/or recoverable pursuant to the provisions of the Insolvency Act 1986; (f) to do all such things as may be necessary or expedient for the protection of the Company's property or assets; (g) without prejudice to the generality of the foregoing, to bring or defend or proceed with any action or other legal proceedings on behalf of the Company and in its name or his name as appropriate for the purpose of exercising the above functions, and if so advised to compromise such proceedings; and (h) to do all things necessary or incidental to the foregoing functions, duties and powers. 7. The Provisional Liquidators shall have the following further powers: (a) to seize and remove all desktop computers (PCs), computer servers, laptops and other computer devices containing a hard drive (hereafter referred to as "computers") and other data storage devices (including other hard drive devices not in a computer, diskettes and CD/DVDs) and other peripheral media and their devices shown to be owned or used or to have been owned or used by the Company; (b) to cause the Company (whether the Company is acting as principal or agent) to continue the Company's business and commercial activities (whether as principal or agent) to such extent as the Provisional Liquidators think fit to preserve the Company’s assets until the hearing of the Petition (including the operation of any bank and other accounts) and to exercise all the Company's powers, discretions and functions relating thereto; (c) to be at liberty to terminate, complete or perfect as advised any contracts or transactions relating to the business of the Company or involving transactions relating to assets of the Company (including any third party or trust assets in the possession of or under the control of the Company); (d) to sell, dispose of or assign or deal with the assets of the Company in such manner as the Provisional Liquidators think fit in the ordinary course of business; (e) to retain the services of solicitors, accountants and such other advisers as the Provisional Liquidators see fit; (f) to incur and pay out of the Company's assets such sums as may be necessary or expedient to discharge any professional, legal and accounting advisers' costs, charges and expenses and to give undertakings that the Company will meet such sums; (g) to defend any action or other legal proceedings in the name and on behalf of the Company; (h) to make any arrangement or compromise on behalf of the Company; (i) to enter into communications or agreements with any creditors or debtors of the Company without further order; (j) to pay any employees of the Company as the Provisional Liquidators think fit and insofar as Company funds allow, and to dismiss such employees if there are no funds available to pay them; (k) to get in all current and historical bank statements relating to bank accounts held or previously held in the Company's name; (l) to continue to operate the existing bank accounts of the Company and to open and operate new bank accounts as appropriate and to pay monies into such accounts and authorise payments from such accounts; (m) to exercise all powers, rights and remedies set out in sections 234 to 236 (inclusive) of the Insolvency Act 1986; and (n) to do all things necessary or incidental to the foregoing functions, duties and powers. 8. No disposition of the Company's property by or with the authority of the Provisional Liquidators in the carrying out of their duties and functions and the exercise of their powers shall be avoided by virtue of Section 127 of the Insolvency Act 1986. 9. The Provisional Liquidators shall be remunerated out of the property of the Company as the Court thinks fit in accordance with Rule 7.38 of the Insolvency Rules 2016. 10. The Provisional Liquidators and all parties to the Application shall have liberty to apply.”

[35]Ms Rogers submitted that on a strict reading of the 10 December Order the Sale (being a sale of a significant proportion of the Company’s business and assets) was not within the JPLs’ powers, hence the JPLs were seeking an order that the Court ratify the Sale. However, she also submitted that, notwithstanding the terms of the Ratification Application, the Sale did fall within the terms of the 10 December Order because it was part of protecting the Company’s assets. I understood her reference to “on a strict reading” to mean that it is not clear on the face of the 10 December Order that the Sale was within the JPLs’ functions and powers.

[36]In my judgment, it is necessary to consider first whether the Sale was in fact within the powers and functions of the JPLs as a matter of construction of the 10 December Order, noting that paragraph 6 of the 10 December Order refers to functions and powers, whereas paragraph 7 to powers only. The 10 December Order contains powers that are fairly standard in cases where a provisional liquidator is appointed.

[37]The highlighted wording which appears in paragraph 6(a) of the 10 December Order is in standard form and is similar to that made in earlier cases, such as Re Union Accident Insurance Co Ltd.

[1972] 1 All ER 1105

at 1109a, save that in that case the order did not include the last part of the sub-paragraph, namely “except pursuant to the functions hereby conferred”. In that case, Plowman J held that despite the power in the order being limited “to taking possession of collecting and protecting the assets of the...company but such assets are not to be distributed or parted with until further order” protection of the company’s assets did not necessarily involve keeping all of the offices open. He held that “a reduction of the company’s liabilities is the correlative right of the protection of its assets”.

[38]Ms Rogers said that what had occurred in this case, namely the Sale, was analogous to the position in Re Union Accident in that while a sale of assets necessarily results in the disposal of assets rather than their preservation in physical form, the Sale was the best (and only) means of preserving any value from the assets for the benefit of creditors. The physical assets have been replaced by their cash alternative, thereby preserving the value. In effect, she submitted, these were assets which could be considered perishable in light of the advice from Gordon Brothers. Therefore, their sale and transformation into cash fell within the wording “protect, secure, take possession of, collect and get in all property or assets (of whatever nature)”.

[39]In my judgment, Ms Rogers is correct on the facts of this case. Had the JPLs not accepted the offer, as advised by Gordon Brothers, and had they not caused the Company to enter into the Sale, they would not have been protecting or securing or collecting or even getting in the assets of the Company. Rather those assets would have reduced in value. The directors had said that the Company had effectively ceased trading following termination of its main contracts. While it transpired that there was still some limited trading going on, that was not the substantive trading of the Company. The directors of the Company had acknowledged the debt due to the Petitioners. The Company was insolvent (the directors had expressly asserted the same in the Administration Application) and it must have been inevitable that it was going to end up in liquidation. There was no real prospect of the winding up petition being dismissed and the Company being returned to the control of the directors to carry on the trading it had been undertaking, which is the possibility which gives rise to the provisional nature of the appointment of a provisional liquidator as identified by Etherton J in the Ashborder BV case (above).

[40]The restriction towards the end of paragraph 6(a) that “such assets and property [are] not to be distributed or parted with by the Provisional Liquidators until further order” did not, in my judgment, prohibit the JPLs, faced with the situation they were in, from converting such assets and property into cash. Notwithstanding what Etherton J said in the Ashborder BV case and that the JPLs were not liquidators, on the facts of this case the JPLs were faced with a situation where their only realistic option when seeking to protect or secure the assets was to seek to “realise the assets of the company for the best value they can reasonably obtain”. Having done this, the JPLs have not distributed or parted with those assets. They have merely protected and secured the assets by converting them into cash, which they continue to hold. I stress that this will not usually be the case where provisional liquidators are appointed, but the facts of this case are not the usual facts in which a provisional liquidator is appointed.

[41]In this case, the restriction in sub-paragraph 6(a) on distributing or parting with the assets and property of the Company was expressly qualified by the words namely “except pursuant to the functions hereby conferred”. The “functions hereby conferred” include the functions and powers in sub-paragraphs (f) “to do all such things as may be necessary or expedient for the protection of the Company's property or assets” and (h) “to do all things necessary or incidental to the foregoing functions, duties and powers”. Accordingly, if I am wrong and the JPLs could be said to have distributed or parted with the assets and property of the Company by virtue of the Sale, they will have done so pursuant to the function in sub-paragraph (f) in that they acted in a way which was necessary or expedient for the protection of the Company’s property or assets and/or pursuant to the function in sub-paragraph (h) in that such a Sale was necessary or incidental to their functions, duties and powers. Preserving the best value for the assets in the situation before them was expedient for their protection, including the protection of their value which they were advised was going to reduce. Therefore, in my judgment, the Sale did not contravene the restriction in sub-paragraph 6(a).

[42]Ms Rogers sought in her written submissions to place emphasis on paragraph 7(d) of the 10 December Order, but accepted, correctly in my judgment, in her oral submissions that such reliance was misplaced, because it could not be said that the Sale, which was of the majority of the business and assets of the Company, could be said to be in the ordinary course of business.

[43]Having found that the Sale was, on the particular facts of this case, within the powers granted in the 10 December Order, I ruled that a declaration to that effect should be made to put the matter beyond doubt.

[44]Nonetheless, in my judgment, given the circumstances known at the time of the hearing before HHJ Klein on 10 December, which included the proposed Administration, the proposed pre-pack sale and that the Company had effectively ceased trading, it must have been highly likely that there would be a sale of all or part of what remained of the Company’s business and assets. In those circumstances, it would have been appropriate for the Petitioners, who made the application for the appointment of the JPLs, to have sought an express power of sale to avoid the issues which have arisen in this matter. I appreciate that the information as to the Company having effectively ceased trading was only made known to the Petitioners the evening before the hearing, and I do not wish to seem critical of the Petitioners and their lawyers with the benefit of hindsight, but in my judgment a bit more thought should have gone into what functions and powers HHJ Klein was being asked to grant the JPLs.

[45]It follows from what I have set out above that the JPLs do not need an order ratifying the Sale. However, as the question of the Court’s power to ratify such a sale after the event raises issues of some importance and was argued fully by Ms Rogers, and in case I am wrong as to the proper interpretation of the 10 December Order and its application to the facts of this case, I will address the arguments that the Court should ratify the Sale.

[46]The first question is what power the JPLs have to come back to Court to seek directions. In my judgment, there are at least two bases on which the JPLs can come to Court to seek directions. The first and most clear is that the JPLs were given express liberty to apply in paragraph 10 of the 10 December Order, which they could have utilised. The second is that the JPLs having been appointed by the Court under the 10 December Order must be subject to supervision by the Court. Historically this was clear for example from Palmer’s Company Precedents (17th edn, 1960) part 2 at page 130 which provided:

“If the interim provisional liquidator finds that his powers are not sufficiently wide, e.g., if he is appointed merely to take possession of and protect the assets, and he finds there is a going business which can be sold to advantage if continued or would suffer irreparable damage if discontinued at one, he can apply to the Court for liberty to carry it on with consequential directions and so in regard to other matters.”

Ms Rogers has said that this does not appear to have found its way into later versions of Palmer, but it confirms there was power for a provisional liquidator to apply for directions and I cannot see any reason why such power should have been implicitly removed by the Insolvency Act 1986.

[47]Ms Rogers argued that the JPLs could also apply for directions under section 168(3) IA 1986 which provides that a liquidator may apply to the Court for directions in relation to any particular matter arising in the winding up. In my judgment that route is not open to provisional liquidators as the section expressly applies in the case of a company which is being wound by the Court in England and Wales. A company in respect of which a provisional liquidator has been appointed is not being wound up by the Court. It is not being wound up at all.

[48]The JPLs, in my judgment, therefore had the ability to come to Court at any stage to obtain directions. It follows that if, as was clearly the case, the JPLs had concerns as to whether the Sale was permitted under the terms of the 10 December Order, they could have come back to Court for clarification and/or for express permission to enter into the Sale before the Company entered into it on 19 December 2025. I appreciate that things were moving fast and the JPLs had a lot to deal with. However, a sale of assets by a provisional liquidator is not a usual step as the JPLs were aware. If a provisional liquidator considers it is in the best interests of a company to be given particular powers, he should apply for them (Re Highfield Commodities Ltd

[1985] 1 WLR 149

at 163H). Therefore, not only could they have done so, but in my judgment they should have come back to the Court for directions. I have no doubt that the Court would have been able to accommodate an urgent application of this nature in very short order. There is, in my view, no proper explanation in Mr Leeds’ witness statement as to why this step was not taken. Should a similar situation arise in a future case, I would anticipate that a provisional liquidator would come back for directions in advance of causing the company to sell its business and assets (or part of them).

[49]Having not sought the assistance of the Court in advance of the Sale, the next question is whether the power to do so is available retrospectively. Ms Rogers submitted that it is available and proffered a number of bases for so holding.

[50]First, she pointed to a number of powers contained in the Insolvency Act and Insolvency Rules which are commonly exercised retrospectively. In particular, she points to cases where permission is required to commence proceedings against a company in an insolvency process, but that is not sought until after the event (such as Bank of Ireland v Colliers International UK Plc (In Administration)

[2012] EWHC 2942 (Ch)

[2013] Ch 422

; Gaardsoe v Optimal Wealth Management Ltd (In Liquidation)

[2012] EWHC 3266 (Ch)

[2013] Ch 298

and Registrar of Companies v Swarbrick

[2014] EWHC 1466 (Ch)

, [2014] Bus LR 625), the fact that retrospective permission can be given for the issue of a bankruptcy petition (Kasumu v Arrow Global (Guernsey) Ltd

[2013] EWHC 789 (Ch)

) and the now well settled jurisdiction a Court has retrospectively to appoint administrators and make an administration order, which it is called upon to do when something has gone wrong with the initial appointment (Re Biomethane (Castle Eaton) Ltd

[2019] EWHC 3298 (Ch)

[2020] BCC 111

[51]In these cases, the issue was whether various steps taken had been a nullity, to which the Courts have responded in the negative. The permission cases are, in my judgment, the closest analogy. Paragraph 43(6) of Schedule B1 IA 1986 provides that no legal process may be instituted or continued against a company in administration or the property of the company except with the consent of the administrator or the permission of the Court. There are similar provisions in section 130(2) IA 1986 in respect of companies where a winding up order has been made or a provisional liquidator has been appointed requiring the leave of the Court for actions to be proceeded with or commenced against the company and in section 285(3) IA 1986 in the case of bankrupts. Each of these require the permission or the leave of the Court. In Bank of Ireland v Colliers International UK Plc (In Administration)

[2012] EWHC 2942 (Ch)

, David Richards J (as he then was) considered a number of authorities in the sphere of insolvency proceedings and other civil litigation, before coming to the “clear conclusion” at [35] that retrospective permission could be given for the commencement of proceedings under those three sections of IA 1986.

[52]Each of those sections required the permission of the Court. If contrary to my finding above, paragraph 6(a) of the 10 December Order did prohibit the JPLs from entering into the Sale, that prohibition was only “until further order”, that is to say until the Court gave permission for the Sale by extending the functions and powers granted to the JPLs under section 135(4) and (5) IA 1986. This is closely analogous with the permission required in those other contexts, which also require an order of the Court. In my judgment, just as in those cases, there is no reason why, given the terms of paragraph 6(a) which does not provide that a further order can only be sought before a step is taken, the JPLs should not be able to seek retrospective permission from the Court for the Sale.

[53]Ms Rogers also sought to rely on the historical situation which applied to a liquidator who, prior to the enactment of the Small Business Enterprise and Employment Act 2015 (“SBEEA 2015”), had failed to obtain the required sanction of the liquidation committee, creditors or the Court, in respect of the powers in Schedule 4 IA 1986. She submitted that if a liquidator acted without sanction, it was possible to ratify the unsanctioned act(s) retrospectively under r.7.77(3) of the Insolvency Rules 2016. Although the Insolvency Rules 2016 only came into effect after the changes to IA 1986 made by the SBEEA 2015, r.7.77(3) applied to acts taken by a liquidator prior to those changes taking effect on 26 May 2015. There had been a similar provision in rule 4.184(2) of the Insolvency Rules 1986.

[54]Rule 7.77(3) Insolvency Rules 2016 is of more general application in that it applies to any situation where the Act or the Rules require permission for the liquidator to exercise a power and the liquidator has not obtained that permission in advance. In such situations, the Court or the liquidation committee may ratify what the liquidator has done for the purpose of enabling the liquidator to meet the liquidator’s expenses out of the assets. There is some degree of similarity between the position of a provisional liquidator who acts beyond the functions granted to him and a liquidator who acts without permission in advance, but in my judgment this does not assist Ms Rogers greatly in that the Insolvency Rules make express provision for ratification (albeit for a limited purpose). If there was a general power to ratify, it is difficult to see whey there would be a need for rule 7.77(3).

[55]Next, Ms Rogers relied on a number of Australian authorities on provisional liquidators. However, as she correctly drew to the Court’s attention, the position is not directly identical, as the authorities make clear that a provisional liquidator appointed under Australian legislation has a statutory power to sell the company’s property, but this is subject to later approval by the court and is open to challenge by a creditor or contributory (Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd (1990) 8 ACLC 39 and Re Bayswood Pty Ltd (1981) 6 ACLR 107). In my judgment, because of the difference in the legislation, these cases are of little assistance on the issue of whether the Courts in England and Wales have the power retrospectively to grant a provisional liquidator a power to sell assets where that was not included in the functions and powers granted to him in the order appointing him under section 135 IA 1986. I will return to them on the question of the exercise of the discretion as to whether to approve the Sale.

[56]Ms Rogers’ fourth submission as to why the Court had such power was to rely on the fact that acts of a company can be ratified retrospectively, by ordinary resolution amongst the directors under section 239 Companies Act 2006 or by the principle of unanimous consent between the shareholders in reliance on the decision in Multinational Gas v Multinational Gas

[1983] Ch 258

. In my judgment, these principles are of no assistance to the situation in this case. It is not the directors or shareholders who are being asked to ratify the Sale. While there can be retrospective ratification in either of these ways, it is not suggested that either is actually engaged on the facts of this case, nor is it easy to envisage how they could be in a case where a provisional liquidator has been appointed. Generally speaking, where a provisional liquidator has been appointed, the directors and shareholders are likely to be resisting the winding up petition which has been presented and, if doing anything, are likely to be seeking to prevent the sale of the company’s business and assets as they will be hopeful that the company will be returned to them after the dismissal of the petition.

[57]Finally, Ms Rogers advanced two comparators which she said were persuasive. The first of these is a Creditors’ Voluntary Liquidation, in which the company’s members will nominate a liquidator, whose appointment becomes effective immediately for limited purposes pending the creditors’ nomination of a liquidator. In the period between the members’ nomination and the creditors’ nomination, the first liquidator is entitled to exercise all of the powers in parts 1 to 3 of Schedule 4 IA 1986 only with the sanction of the Court, other than the powers set out in s 166(3), which includes the power to dispose of perishable goods and other goods the value of which is likely to diminish if they are not immediately disposed of. In my judgment, this is not a comparator on the question of whether the Court has the power retrospectively to ratify the Sale. It may well be of assistance as to whether it should ratify if it has the power to do so, but that is a different question.

[58]The second comparator advanced is that of a receiver. In Smith v. Keely

[1997] BPIR 533

, the Court of Appeal had to consider what should happen where a receiver and manager appointed by the Court in business partnership proceedings had not given security as required to under the order appointing him. Notwithstanding this, the receiver and manager acted as if his appointment continued. The Court of Appeal held that the Court had jurisdiction to extend the time for the provision of the security even after the time for provision of the same had expired. They held that the appointment of the receiver and manager had lapsed by virtue of the non-provision of security, but the Court could nonetheless reappoint the receiver and manager and direct that he account on the footing that his appointment had continued without interruption from the date of the original appointment to the date of the reappointment.

[59]In his judgment, Millett LJ (as he then was) having set out the correct form of order which

the Judge at first instance should have made said at page 539 (emphasis added):

“It makes clear what the effect of the order is. It recognises that the receiver’s original appointment as a receiver has lapsed and that he needs to be reappointed. It recognises that the question of the validity of his interim acts is a separate question. But that the court has power to validate or confirm them is, with respect to the views of the judge in the present case, in my judgment beyond question. There is no discernible distinction which can be drawn between a receiver, validly appointed, who acts beyond his powers and a receiver whose appointment has lapsed but who being unaware of the fact continues to act despite the want of any authority to do so. In each case he will have acted without authority, and in each case the court has the necessary power to confirm his acts. The jurisdiction of the court is inherent. It rests on the same principle as its power to appoint the receiver in the first place. That power is premised on the fact that all parties interested in the disputed property are before the court, and the court takes the management of that property into its own hands and appoints an officer of the court as receiver to manage the property on behalf of all the parties in accordance with their respective rights when finally determined. There is, therefore, a close analogy with the position of principal and agent. Just as a principal may ratify not only the unauthorised acts of a duly appointed agent, but also the acts of a party who has not been appointed an agent at all, so in my opinion the court has the necessary jurisdiction to confirm and ratify the acts of a receiver, whether they be the acts of a receiver properly appointed who is acting beyond his powers, or the acts of a person who mistakenly believes that his appointment as a receiver has continued when it has not.”

[60]While the power to appoint a receiver and manager is part of the Court’s inherent jurisdiction and the power to appoint a provisional liquidator comes from section 135 IA 1986, the provisional liquidator is in a similar position to the receiver and manager. Each is charged with managing the business and assets of the entity in respect of which they are appointed, each being put into office essentially to preserve as far as possible the status quo. Given that the Court “beyond question” has the necessary jurisdiction to confirm and ratify the acts of a receiver properly appointed who is acting beyond his powers, in my judgment there is no reason why it should not also have the necessary jurisdiction to confirm and ratify the acts of a provisional liquidator properly appointed but who is acting beyond the functions and powers set out in the order appointing him.

[61]Accordingly, while I do not accept all of Ms Rogers’ bases for submitting that the Court has the power to entertain a retrospective application to approve the Sale, that is to ratify the actions of the JPLs, in my judgment the Court does have such a power.

[62]It is necessary next to consider whether, again upon the assumption that paragraph 6(a) of the 10 December Order prohibited the Sale, whether the actions of the JPLs should be ratified. In my judgment, given the facts of this case set out above, they should be ratified.

[63]The evidence is that the likely impact on the value of the assets and business of the Company if the Sale did not take place was that they would decrease. The Company had effectively ceased to trade. The Sale had the benefits identified in the Gordon Brothers’ advice. It was, in my judgment, without doubt the correct course of action in order to seek to preserve value for the ultimate benefit of creditors. The reasons why the JPLs formed the view that the Sale should be proceeded with as set out in paragraph 19 of Mr Leeds’ witness statement are valid reasons for a sale to have been entered into and had there been a liquidator already in place, a decision to sell for those reasons would have been unimpeachable. There is no evidence of any prejudice caused by the Sale. The Petitioners did not object to the Sale or the Ratification Application. No other creditor has come forward to make any representations either way on the propriety of the Sale. I was told, although it is not clearly stated in the evidence, that the purchasers were connected to, if not were, the directors of the Company so they had no issue with the Sale. They were given notice of the Ratification Application and did not respond to object.

[64]Given that a provisional liquidator does not usually sell part or all of the business of a company over which he is appointed, there is little assistance to be found in English and Welsh authorities as to whether the Court should approve such a sale as the Sale in this case.

[65]There is a lot more jurisprudence in Australian authorities. Those provided by Ms Rogers are illuminating as to the approach taken when there is an application to approve the sale of the company’s property. If there is a power in the Court retrospectively to grant permission for a sale of a company’s assets and business, as I have already held there is, the situation becomes comparable to that in Australia where there is a statutory power of sale subject to approval by the Court.

[66]In Re Codisco Pty Ltd. (1974) ACLC 27,897 ¶40-126 Bowen CJ in Eq (sitting in the Supreme Court of New South Wales) held at 27,906:

“Because [a provisional liquidator] is appointed to preserve the assets and undertaking of the company pending the hearing of the petition to wind up, his task generally will be to preserve the existing position, to maintain the status quo. … If he departs from this role, and seeks to exercise the powers which have been conferred upon him for other purposes, he risks the disapproval of the Court … However, cases arise where the only way to preserve the assets and undertaking of a company, or at least their value for creditors and contributories, may be to sell them quickly, and to do so on terms. Where this is so, having the power to sell in this way, subject to the Court’s approval, a provisional liquidator may exercise it, and the Court, if it thinks fit, may approve. … … it still remains a question whether I should in the circumstances approve.”

Having reviewed all of the evidence in the case and taken into account the views of the creditors, the Chief Justice in Equity concluded that the best course in the interests of creditors and contributories was to approve the sale. This was applied in Re Bayswood Pty Ltd (1981) 6 ACLR 107 where the alternative was the imminent necessity to close down the business and in Re Rothwells Ltd [1990] 2 Qd.R. 181 at 187. … it still remains a question whether I should in the circumstances approve.”

[67]In my judgment, these Australian authorities give support to the proposition that where a provisional liquidator is faced with a situation where, having taken appropriate advice, the only way to preserve the assets and undertaking of a company, or at least their value for creditors and contributories, is to sell them quickly, a Court in this jurisdiction should extend his functions to allow that to happen. If the provisional liquidator does not seek and obtain the Court’s prior authorisation to do this, but the provisional liquidator seeks ratification of the sale, the Court should provide that ratification if it would have extended his functions had he applied prospectively. It could not be appropriate in such circumstances to “punish” a provisional liquidator for not having sought the authorisation in advance.

[68]It follows that if I had found that the terms of the 10 December Order had not permitted the Sale, I would have made an order ratifying the actions of the JPLs in causing the Company to enter into the Sale by retrospectively extending the JPLs’ functions and powers to permit this.

[69]However, this judgment should not be seen as some form of carte blanche for provisional liquidators to sell the business and assets of a company in respect of which they have been appointed. My decision to do so in this case is based solely on the unusual fact pattern here and the urgency of the situation in which the JPLs found themselves. In addition, this judgment should not be seen by provisional liquidators and those advising them as a green light to undertake such sales without having been granted the necessary functions and powers by the Court in advance, either on appointment or by way of an urgent application to vary and extend those powers. If this situation were to arise again, I would expect a provisional liquidator to make that urgent application and allow the Court to decide what was appropriate in advance, rather than being presented with a fait accompli.

The Petition

[70]Notwithstanding the original opposition of the Company, by its directors, to the Petition, that opposition has melted away. No other creditors, either opposing or supporting, attended the hearing on 9 February. I was satisfied on the evidence that the Company is insolvent and that the EU Regulation on Insolvency Proceedings as it has effect in the law of the United Kingdom does not apply and therefore these are COMI main proceedings.

[71]It was therefore appropriate to make, and I did make, an order for the winding up of the Company under the Insolvency Act 1986.

[72]All of the Petitioners’ costs other than the costs of the Petition were dealt with in the 10 December Order. There is no reason to depart from the usual order as regards the Petitioners’ costs. Accordingly, the Petitioners’ costs of the Petition shall be paid out of the assets of the Company. 12th February 2026