The High Court has set down its position in relation to funding arrangements with court-appointed liquidators.
Arrangements to fund a liquidator generally arise in circumstances of lack of assets or readily available assets where creditors want something pursued or liquidation remedies invoked.
The case in question(1) concerned a proposed funding arrangement where a secured creditor owed in excess of the value of the secured property. The creditor, which relied on its security and not proving as a creditor in the winding-up, indicated that it would consider the possibility of the liquidator's discharging costs and remuneration relating to sale if the liquidator could sell the secured property and pay it the net proceeds in exchange for a release of its charge.
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