Re Premier Motor Auctions Leeds Ltd and another (In Liquidation)

Company – Liquidation. The Chancery Division ruled on an application by liquidators of Premier Motor Auctions Leeds Ltd and another company for orders that litigation expenses of proceedings brought by the companies be approved and authorised by the court, pursuant to r 4.218E of the Insolvency Rules 1986, SI 1986/1925 and for orders that the application be heard in private and not be served on a creditor of the companies (Lloyds) until after the final determination of the proceedings. The court held that the circumstances of the case were not sufficiently exceptional to justify derogation from the open justice principle. A question of construction was raised as to whether the condition specified in r 4.218B(1)(c) was satisfied and whether it could be said that the liquidators would have to have recourse to property comprised in or subject to Lloyds' floating charge in order to pay litigation expenses. However, it was not appropriate to deal with the application in the absence of Lloyds and the application and the evidence were ordered to first be served on Lloyds.

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