Lisa Linklater KC successfully secures directions from the High Court in precedent setting insolvency case: Re Torotrak plc (in liquidation)

February 9, 2023

Lisa Linklater KC from Exchange Chambers has acted for the joint liquidators of a public limited company in a precedent setting case, Re Torotrak plc (in liquidation) [2023] EWHC 115 (Ch), before HHJ Hodge KC, sitting as a judge of the High Court in the Business and Property Courts in Manchester.

Torotrak plc (in liquidation) was an engineering company specialising in innovative products to meet the motor industry’s need for cleaner, more fuel-efficient vehicles.

The company entered into administration on 8 December 2017, the joint liquidators (Mr Scott Christian Bevan and Mr Simon David Chandler) being appointed subsequently.  The liquidators had made distributions to creditors in full and were now faced with a limited surplus (£304,859.20 before deduction of costs and expenses) and over 8,500 members, many of whom were individuals, residing around the globe. This gave rise to issues of proportionality, fairness and the restrictive wording of s107 of the Insolvency Act 1986.

Pursuant to section 112 of the Insolvency Act 1986, Lisa Linklater KC successfully secured directions from the High Court in respect of the making of distributions to members in light of s107 of the Insolvency Act 1986, an increase in the remuneration cap of the liquidators and prospective relief from liability for the liquidators under s1157 Companies Act 2006.

Lisa suggested a range of legal solutions to the practical issues that arose from the facts and the restrictive wording of s107 of the Insolvency Act 1986, to reach a proportionate, practical  and cost-effective outcome.  After considering Lisa Linklater KC’s submissions, HHJ Hodge KC ruled that the appropriate solution was to require the joint liquidators to write to the known shareholders at their last-known addresses, inviting claims to be made within an appropriate period of time, and making it clear that no such claims will be considered after that cut-off date.

As for tracing members, HHJ Hodge KC ruled that a single advertisement should be placed in the London Gazette, also containing a similar cut-off date for claims, and similar information. Finally, notice should be given on the portal maintained by the joint liquidators, in respect of Torotrak plc (in liquidation).

Lisa Linklater KC was instructed by Eversheds Sutherland (International) LLP

The full judgment can be viewed here.