Court appointment of an additional liquidator

Following the application of a contingent creditor, the court appointed an additional liquidator in the liquidation of Noal SCSp. The contingent creditor made the application on the basis that the current liquidator, Mr Murphy, was in a position of conflict having entered into a debenture and a confidential funding agreement.

Mr Murphy strenuously denied the allegations and objected to being removed and replaced before he had the opportunity to put his defence before the court.

On considering the matter, the court found that:

1. Contingent creditors have a legitimate interest in the relief sought, and, therefore, the court had jurisdiction under section 108 IA1986 to appoint an alternative liquidator.
2. It was arguable that, where there was a serious conflict, a liquidator may be unable to carry out their functions, which would give rise to a jurisdiction to appoint an alternative liquidator pursuant to section 112 IA1986.
3. The court found that the court must be able to provide relief on an interlocutory basis in a case where the court would be able to remove and replace for cause shown at the final hearing. Whilst the court may be reluctant to remove and replace the liquidator on an interim basis without a full hearing, it could be minded to appoint an additional liquidator to 'hold the position' until the full hearing. This power isn't restricted to cases where the court had a supervisory jurisdiction over the relevant office holders, such as compulsory liquidations. It's applicable to both compulsory and voluntary liquidations, there was a power to apply to the court to remove and replace a liquidator.

This decision highlights the importance of maintaining impartiality and transparency in liquidation proceedings.

Noal SCSp v Novalpina Capital LLP [2025] EWHC 54 (Ch)

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