Liquidator permitted to disclose documents to assignee

A liquidator had assigned claims against a director to a litigation funder. The respondent director objected to the liquidator’s disclosure of her personal bank statements to the assignee, which were relevant to the claim against her.

The liquidator applied for a declaration that he was permitted to disclose the statements to the assignee, arguing that the diversion of money through the personal bank accounts could only be evidenced by the bank statements, and that if the assignee wasn't permitted to use them there was a real risk that the claims would fail.

The court granted the declaration in favour of the liquidators. Although liquidators had an implied duty of confidentiality in respect of documents obtained under s.236 IA 1986, that duty shouldn't prevent them from performing their statutory duties. They had a duty to obtain the best realisation for the creditors, including the option to assign them to a third party. Any purchaser of the claims would have to be given all the documents necessary to substantiate them. There was also a public interest in ensuring the free flow of information between liquidator and assignee, particularly where the insolvent estate retained an interest in the outcome of the claims. That said, confidentiality should be retained where it needed to be.

Here, the assignee needed the bank statements to substantiate the claims at trial, and they should, therefore, be made available to it. That was consistent with parliament's aim in enabling liquidators to sell claims for the benefit of the insolvent estate. To balance the respondent’s rights, the bank statements could be redacted to remove personal information.

In any given case, it was for the liquidator to decide whether it was necessary to seek the court's permission before providing confidential information to an assignee or prospective assignee. Here, the liquidator had been right to seek permission.

Asertis Limited, Mark Eligah Thomas Bowen (in his capacity as Liquidator of Solstice (SW) Limited- in liquidation) v Sean Adrian Melhuish, Shena Joy Melhuish, Louise Bowman [2024] EWHC 2819 (Ch)

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