The High Court declined to order the compulsory winding up of Larkin Partnership Limited, which was already in creditors’ voluntary liquidation, but adjourned the petition to allow further consideration of concerns about the liquidator and his solicitors. The hearing was before Miss Justice Laffoy on 15 March 2010; the judgment was delivered on 22 March.
Feldimont Limited, the company’s landlord and creditor, had sought a court winding-up order and an official liquidator. Alternatively, it asked the court to direct an investigation into the 2009 transfer of the company’s business to Leo Burnett Associates Limited. The court treated that alternative request as an application for directions under section 280 of the Companies Act 1963.
The dispute centred on the company ceasing to trade around June 2009 and the movement of its personnel to Leo Burnett. Feldimont relied on a press release and newspaper report referring to the business being acquired and a possible earn-out payment to Martin Larkin. It argued that the company’s assets or goodwill may have been transferred without payment. Larkin denied improper diversion, saying the business depended on personal client relationships and had no assets of value to sell. The liquidator told the court that initial information indicated no consideration had passed to the company, and said he had instructed an accountant to review the transaction. The accountant’s engagement remained subject to formal terms.
Justice Laffoy found Feldimont was justified in its grievance and that the questions about the transaction needed rigorous investigation. She also considered that the liquidator had shown a lack of vigour in investigating the company’s closure and the move to Leo Burnett. However, she concluded the issues could be addressed through the existing voluntary liquidation, without a compulsory court winding up. She said the court’s involvement was needed for the pending application to disclaim the lease and for any proceedings considered appropriate after the investigation.
The judge did not annul the members’ winding-up resolution or restart the process. Nor did she remove the liquidator: Feldimont had not formally sought his removal. She said the liquidator must have an opportunity to respond to the court’s concerns, and that the alleged conflict involving the solicitors acting for him also needed to be resolved, either by evidence that no conflict existed or by the solicitors stepping aside.
The petition was adjourned until 26 March 2010 to address those two issues. The judgment did not determine whether the business transfer involved wrongdoing, nor decide the parties’ disputed claims about rent or compensation under the lease.