Background
In Secretary of State for Business and Trade v Sahonta and others, Morton’s Rolls Ltd, a well-known bakery, collapsed after running into severe financial difficulty. A conditional agreement was reached for a new company, Phoenix Volt, to take over elements of the business. But despite the agreement being signed, the bakery could not be taken over immediately. Morton had stopped trading, its bank account had been frozen, staff had been laid off, and Phoenix did not yet have access to the premises.
Shortly afterwards, a provisional liquidator was appointed to Morton. During this period, Phoenix made arrangements to restart production and eventually resumed baking operations, employing a number of former Morton staff.
Former…