Settlement Agreements and Winding Up
Author: David Seals
In Officeserve Technologies Limited (in liquidation) and another v Anthony-Mike, the High Court held that a settlement agreement entered into between a company and one of its directors during the period between a winding up petition being presented and the making of the winding up order was void. The Court relied on Section 127 of the Insolvency Act 1986 which provides that any disposition of the company's property made after the commencement of the winding up is void, unless the court orders otherwise, to ensure that it is available for distributing to the creditors. This is apparently the first time this section has been used to invalidate a settlement agreement.