Information request fails

The liquidators of a company (365) applied for an order for delivery up of all documents held by an associated company (ERL) and its solicitors.

ERL and its solicitors resisted that application, arguing that the request was far too generic, in light of the documentation held, and that it was unreasonable to expect them to accede to this request.

In addition, ERL’s solicitors were not instructed by 365, so a number of the documents were also covered by potential privilege.

The judge noted that the liquidators had failed to demonstrate in their evidence why it was reasonable to require delivery up of the documents required, and ERL and its solicitors had complied with focused requests for information, where they could.

The judge reviewed information requests made by the liquidators over the previous four years and found that the liquidators’ application was “fundamentally misconceived” in that it failed to establish why the requests for information were reasonable and dismissed the application against ERL.

The judge went on to consider the application against the solicitors and dismissed that application, again holding that the application was focussed on the liquidators’ entitlement to the information requested, not why it was reasonably required.

Rumours are that this decision will be appealed by the liquidators. However, the decision will be welcomed by practitioners who receive generic burdensome requests for information by office holders, with the suspicion that the insolvency legislation powers are being used to circumvent the pre action disclosure provisions.

In reference to the matter of Eversholt Rail (365) Limited [2024] EWHC 2217 (Ch).

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