Q&As

What are the grounds for a successful validation order in order to pay creditors for work completed or goods supplied? Does it make a difference if the payments made are valid and duly owed?

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Published by a ÑÇÖÞÉ«ÇéÍø Restructuring & Insolvency expert
Published on: 13 September 2017
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Under section 127 of the Insolvency Act 1986, any dispositions of property made by a company after the commencement of a winding-up are void. A winding-up of a company by the court commences upon the presentation of the petition. It is therefore necessary to apply to the court for a Validation order if a petition is presented.

If a company wishes to continue to trade or dispose of an asset after the presentation of a petition, it is necessary to apply for a prospective validation order because if an order is made on the hearing

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United Kingdom
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Key definition:
Validation order definition
What does Validation order mean?

An order of the court ratifying a disposition of property that is at risk of being rendered void, or which in the absence of an order would be void, pursuant to the rules which preserve the property of bankrupts and companies in compulsory winding up.

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