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Company – Insolvency. The Chancery Division, on the application of the joint liquidators of four companies in creditors ' voluntary liquidation, granted a declaration that proposed dividends were held on trust by the joint liquidators for the first, second and third respondent companies who, as guarantors of a loan borrowed by the parent company, had repaid the debt in full. The court held that it should adopt an approach which sought to achieve equality of contribution to a parent company guaranteed by each of the companies who had been able to contribute the discharge of the liability of the parent company and that such a declaration would achieve the most equitable outcome as between the creditors of each of the paying subsidiary guarantors in the present case.
Company – Insolvency. The Chancery Division, on the application of the joint liquidators of four companies in creditors ' voluntary liquidation, granted a declaration that proposed dividends were held on trust by the joint liquidators for the first, second and third respondent companies who, as guarantors of a loan borrowed by the parent company, had repaid the debt in full. The court held that it should adopt an approach which sought to achieve equality of contribution to a parent company guaranteed by each of the companies who had been able to contribute the discharge of the liability of the parent company and that such a declaration would achieve the most equitable outcome as between the creditors of each of the paying subsidiary guarantors in the present case.
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