An application was presented to the Court by the provisional liquidator of a limited company to restrain a debenture holder from obtaining decree for the amount contained in his debenture bond. Held that the debenture holder was entitled to have decree, the liquidator not being prepared to find security for any damages the creditor might suffer, and application refused.
Held: Reid, a creditor of the Benhar Coal Company, had presented a petition for the judicial liquidation of the company. Upon representations by the company to the effect that they wished to investigate their affairs fully, and would require time, the Court of consent meantime appointed Mr Molleson, C.A., provisional liquidator.
In these circumstances, and Reid’s petition being still in Court, Thomas Syme, a debenture holder, raised an action in the Court of Session concluding for payment of andpound;1000, the amount contained in certain debenture bonds which he held of the company, and the provisional liquidator, with the concurrence of the company, in these circumstances presented a note to the Court applying to have Syme restrained from obtaining such decree.
The 85th section of the Companies Act 1862 was as follows:-‘The Court may, at any time after the presentation of a petition for winding-up a company under this Act, and before making an order for winding-up the company, upon the application of the Company, or of any creditor or contributory of the company, restrain further proceedings in any action, suit, or proceeding against the company, upon such terms as the Court thinks fit.’
Citations:
[1878] SLR 16 – 210
Links:
Jurisdiction:
Scotland
Company, Insolvency
Updated: 03 February 2022; Ref: scu.577487