Liquidator’s carrying on business

The Company went into compulsory liquidation in March 2021. It was part of a group which operated a power station near Port Talbot. The power station had stopped generating electricity, but remained connected to the National Grid and electricity was supplied, via a substation on the site, to a number of customers including the Baglan Energy Park.

The Official Receiver was appointed as liquidator and special managers were appointed by the court to assist the liquidator. During 2021, the liquidator told the Company’s customers that they should find an alternative electricity supply and in November 2021 said the supply would be terminated from 14 January 2022. Various customers and the Welsh Government applied to the court to prevent the disconnection until installation of a new power supply and pending the substantive hearing of the application gave a cross-undertaking in damages to obtain an agreed suspension of the disconnection.

An application was made to court for directions in which the Company in response sought expedition of the substantive application arguing that the Company could not continue to supply electricity as it was not within the liquidator’s statutory power under Schedule 4 paragraph 5 Insolvency Act which only extended “to carry[ing] on the business of the company so far as may be necessary for its beneficial winding up.”

The court ordered an expedited hearing as the liquidation was otherwise ready to be completed and there could be real detriment if the de-energising of the site could not be put in hand as soon as possible.

Re Baglan Operations Ltd [2022] 1 WLUK 215

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