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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 31300
Experience:  Over 5 years in practice
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I liquidated my company in 2014. I have been asked for

Customer Question

Hi
I liquidated my company in 2014 . I have been asked for approx £31,000 in unexplained withdraws from the company the companies funds . I have have explained as much of this as possible and had taken part of this as a salary / dividend. I have not put this away and am currently employed on a very low wage. What is my legal responsibility under section 238 of the insolvency act 1986
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.

Hi, Thank you for your question and welcome. Has this demand come from the liquidator? What explanation have you provided for the with drawl? Did the with drawl go to your personally? What year were the with drawls made and was the company solvent at the time? Kind regards AJ

Customer: replied 1 year ago.
Hi Yes the money was withdrawn in cash. the withdraws were made during 04/2014 and January 2015. The company was solvent during this period.
Customer: replied 1 year ago.
the demand has come from the Liquidator's solicitor.
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. Were the withdrawls made after liquidation? If the company was liquidated in 2014? What explanation did you give for the with drawl? Kind regards AJ

Customer: replied 1 year ago.
Hi no they were made during the 2014 and a couple during January 2015. The company was liquidated in february 2015
Customer: replied 1 year ago.
Thats ok I just need to know what the ramifications of this request are.
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. Please can you confirm what explanation you have given for the with drawl? Technically the S.238 provision can challenge any transaction going back 12 months from the date of the winding up order. You have then consider whether the liquidator has the evidence and the funds to sue you under this section? Why have they said they are not satisfied with your explanation?