The case of Greenbank Technology Ltd (in liquidation) concerned a failed attempt to place a solvent company into a members’ voluntary liquidation (MVL) as part of a group rationalisation.
The company was intended to enter an MVL and, on the evidence, was plainly solvent: its assets and business had been transferred to its parent, liabilities discharged, intercompany balances set off, and it was left with £1 in assets and no liabilities. The difficulty was procedural. Although both directors signed a declaration of solvency, one director’s declaration was made over video before a “support worker”, rather than before a person authorised to take statutory declarations under the Statutory Declarations Act 1835.
The applicants asked the court to waive the defect under rule 12.64 of the Insolvency Rules 2016, or alternatively to rescind or stay the resulting creditors’ voluntary liquidation (CVL).
ICC Judge Agnello KC held that the defect could not be waived. The requirement that a declaration of solvency be made before a suitably qualified person was fundamental to the statutory MVL regime, particularly given the seriousness of the declaration and the potential criminal consequences for directors who make it without reasonable grounds. This was not a mere formal irregularity: without a properly made declaration, no effective statutory declaration had been made. The company had therefore entered CVL, not MVL.
The court also held that it had no jurisdiction to rescind a voluntary liquidation, because rule 12.59 applies only to court orders. However, it did have jurisdiction to stay a voluntary liquidation under section 112 of the Insolvency Act 1986. On the facts, and given the clear intention to enter an MVL, the court granted a stay of the CVL without time limit.
The decision is a sharp reminder that MVL formalities matter. Practitioners should ensure declarations of solvency are properly sworn before an authorised person, otherwise a solvent liquidation may unexpectedly become a CVL.
Greenbank Technology Ltd (in liquidation) [2026] EWHC 1466 (Ch)
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