Foreign company can slip from administration into liquidation, High Court rules

A Guernsey-incorporated company whose centre of main interests sits in England can pass directly from administration into a creditors’ voluntary liquidation under Schedule B1 of the Insolvency Act 1986, even though the Act appears to bar voluntary winding up of overseas companies, the High Court has ruled.

Esken Limited, a Guernsey company, entered administration in England in March 2024 after its directors filed the requisite notice on the basis that the company’s centre of main interests was located in England. During the administration, the joint administrators realised substantially all of the company’s assets. The estate’s remaining tasks consisted largely of reviewing claims, distributing funds to creditors, and winding down the corporate structure.

The administrators opted to exit administration by invoking paragraph 83 of Schedule B1, which allows an administrator to file a notice converting the administration into a creditors’ voluntary liquidation once secured creditors have been paid or provided for and a distribution to unsecured creditors is anticipated. The notice was filed in March 2025 and registered shortly afterward.

What should have been a routine procedural step instead raised a thorny statutory question. Section 221(4) of the Insolvency Act provides that an “unregistered company” cannot be wound up voluntarily except in accordance with the EU Insolvency Regulation, a framework that has shifted significantly following Brexit. Esken, incorporated in Guernsey, falls outside the UK’s domestic company register, raising the issue of whether the voluntary liquidation was legally permissible.

Judge Burton concluded that the apparent conflict disappears once the statutory scheme is properly read. Section 221 sits within Part V of the Insolvency Act, which governs the winding up of unregistered companies by the Court. By contrast, the paragraph 83 conversion mechanism forms part of the administration regime in Schedule B1 and operates independently of the Part V framework.

The Court held that paragraph 83 expressly applies to companies with their COMI in the United Kingdom, including those incorporated outside the EEA. Once the administrator files the notice and it is registered, the statute automatically deems the company to be wound up as though a resolution for voluntary winding up had been passed.

On that basis, the conversion from administration to creditors’ voluntary liquidation did not require reconciliation with the restrictions in section 221(4). The liquidation arose by operation of the administration provisions themselves, rather than under the voluntary winding up regime for unregistered companies.

Read the decision here.

Professionals involved:

• Clare Kennedy and Daniel Imison of AlixPartners in their capacity as joint liquidators of Esken Limited