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:

A party's right to terminate a contract in the event that the other party becomes insolvent is one of the most commonly seen termination rights in outsourcing and technology agreements. However, the effectiveness of such provisions in the future could change in agreements governing the provision of IT services, as the new Enterprise and Regulatory Reform Act 2013 gives the Government the power to extend the law that currently protects supplies of gas, water, electricity and communication services during an organisation's insolvency to the supply of IT services.