The Institute of Chartered Accountants in England and Wales (ICAEW), the Institute of Chartered Accountants of Scotland (ICAS) and the Insolvency Practitioners Association issued joint guidance at the end of August following a recent High Court decision imposing a strict “12-month rule” for MVLs.
In a ruling in July, the High Court strictly interpreted section 89 of the Insolvency Act 1986 (IA86), confirming that a company in a solvent MVL must pay all its debts within 12 months of the commencement of the winding up or convert the liquidation to a creditors’ voluntary liquidation (CVL). The judgment said that the liquidator has no discretion to make payments to creditors beyond the first 12 months of the liquidation.
The…