Liquidators are commonly appointed to a company where, prior to liquidation the company was a trustee of a trust. Often when the liquidators are appointed, the company has ceased to be the trustee and a replacement trustee has not been appointed.

In these circumstances, the company in liquidation is a bare trustee in relation to the trust assets and the liquidator will assume this role until a replacement trustee is appointed. Often a replacement trustee is not appointed.

Does the liquidator as bare trustee have a power to sell trust assets?

Secured creditors should not allow a liquidator to sell a secured asset without first:

You are about to enter a new dimension. A world not only of law and of the Insolvency Act 1986, but of equity. You are about to enter… The Twilight Trust Zone!

Cash-flow is the life blood of a company. As a company fails the flow of this vital sustenance grows weaker. The heart stutters and fails. The company is dying. Worse, it is unable to meet its liabilities as they fall due, and so fails one of the statutory tests of insolvency.