The company liquidator : the legal framework governing the competence, liability and accountability of the liquidator

Abstract

This thesis is an analysis of the legal framework underlying the competence, control, liability and accountability of the liquidator. It explores the manner in which a liquidator is made responsible for every single act he performs throughout the performance of his functions. Since it was felt that the liquidator's functions could only be properly understood if one is familiar with a winding up procedure, Chapter One provides an ordered presentation of the Maltese and English substantive law governing the liquidation of companies in the three forms of winding up. Chapter Two analyses the provisions regarding the competence of the liquidator and the qualifications required for a person to qualify as a liquidator. The second part of this Chapter is an overview of all the relevant Maltese and English provisions regulating the liquidator's mode of appointment in the three forms of winding up. The fulcrum of this thesis is found in Chapter Three. Instead of providing a thorough examination of the powers and duties of the liquidator, this Chapter focuses on the way the exercise of these powers is monitored. In fact, the main aim of this thesis is to see whether such functions are systematically overseen by the statutory bodies established by both local and foreign law and to assess the extent to which such supervision makes on accountability stems from the central fact that the liquidator manages other people's affairs and therefore is expected to do this as a "bonus paterfamilias." This gives rise to the duty to perform such functions with the due care and diligence expected from such people who have entrusted him with such a delicate post. Chapter Four is dedicated to a study of the true nature of the liquidator's status and the liability which stems from such a status. The major part of this chapter is an examination of a number of cases where the Courts decided to review and quash the liquidator's acts and condemn the liquidator to compensate for the damages resulting from his acts or omissions. Chapter Five is an analysis of what happens once a winding up procedure is over. This Chapter explores at length the position in both England and in Malta regarding the possible revival of a company once it is struck off the register. This study also covers the important area of the responsibility of the liquidator, once the liquidation procedure is terminated and therefore at a time when the company has ceased to exist. Finally, Chapter Six outlines the cases contemplated by law and illustrated by case-law regarding the ways the liquidator's office may be terminated that is either by renunciation, resignation or removal.