4 Appointment of a Provisional Liquidator

The chapter discusses various aspects of appointing a provisional liquidator. A provisional liquidator of a company may be appointed by the court under the Insolvency Act 1986 (IA 1986), s 135 at any time after the making of an application for a bank insolvency order. Provisional liquidators are independent persons operating under the direction of the court for a purpose that is one entirely of preservation during an interim period. He/she will take charge of the company’s affairs, maintain the status quo and prevent prejudice either to those supporting the winding-up petition or to those against it, pending the court’s decision on the petition. He/she terminates the powers of its directors as effectively as does the making of a winding-up order. The appointment terminates the actual authority of all the company’s agents, but the authority of an agent is not terminated until the agent has notice of the appointment of the provisional liquidator.