The Insolvency Act 1986 (IA86) gives officeholders various and wide-ranging powers to compel provision of information from, and cooperation of, directors, bankrupt individuals and any third parties which are in a position to provide information about the insolvent’s affairs.
Getting the property and records
In a corporate insolvency, the court may, under Section 234 IA86, require anyone holding company property, books, papers or records to deliver them up. In a bankruptcy, the equivalent sits in Sections 311 and 312 IA86: the trustee in bankruptcy is under a duty to take possession of the bankrupt’s books and records, and any banker, agent or other person holding the bankrupt’s property must deliver up such information.
The duty to cooperate
Under Section 235 IA86, a company’s present and former officers, employees and agents are under a statutory duty to give the officeholder whatever information they reasonably require to assist in their administration of the insolvent estate, without the need for a court order. Section 333 IA86 applies similar provisions requiring a bankrupt to cooperate with the trustee in bankruptcy, a duty which is ongoing and survives the bankrupt’s discharge.
Engaging the assistance of the court
We have recently, in circumstances of continued non-cooperation, obtained a suspension of discharge from the court against two separate bankrupt individuals. The suspensions continue until further order and can only be lifted once they have complied with the trustees in bankruptcy and satisfied the court of that.
Where voluntary cooperation isn’t forthcoming, Section 236 (companies) and Section 366 (bankruptcy) provide for the officeholder to apply to court for an order summoning a person for examination before it or requiring documents or an account to be provided on oath. Neither power stops at the director or the bankrupt, and extends much more widely, to cover “any person” who may hold relevant property or information pertaining to the dealings and affairs of the insolvent, including but not limited to:
- banks and other financial institutions
- accountants, solicitors and other professional advisors
- a spouse or former spouse
- persons outside the jurisdiction
Parties can be held in contempt of court for failure to comply with a court order.
These powers are valuable tools to assist an officeholder in reconstituting knowledge or furthering understanding, particularly in circumstances where there are often limited or incomplete books and records available, or none at all. The powers available are not, however, unlimited. The court weighs the need for the information against the burden on the respondent. In Webb & Anor v Eversholt Rail Ltd & Anor [2026] EWHC 101 (Ch), the court found the liquidators were not entitled to “everything forever” relating to a company’s affairs, finding that reconstitution of knowledge alone is not sufficient to make an order under Section 236. In contrast, in Helen Dale & Ors v BDO LLP (Re NMCN PLC and NMCN Sustainable Solutions Ltd) [2025] EWHC 446 (Ch), the court granted a Section 236 order where the liquidators’ request for information contained in audit files was targeted and precisely explained the purpose for which it was sought, which aligns with successful Section 236 applications that we have made by applying the same targeted approach.
The provisions of the legislation provide the standing and authority for information to be provided, which, in practice, we often use without the need for the court’s involvement. By way of example, in a recent corporate group matter, there was intermingling of files and documents across various entities, where nothing was filed under a particular insolvent entity’s client record. We relied on our entitlement provisions to access the records, and engaged positively with the IT providers to carry out keyword searches to identify the relevant documents in a targeted, proportionate and manageable way, consistent with Eversholt.
Preventing people and evidence from disappearing
Where there is thought to be a risk of an individual absconding, the court’s general power to control a bankrupt under Section 363 IA86 can be used to seize a passport, and under Section 365 IA86 to seize books, papers, records, money or goods in their possession – extending, if necessary, to breaking open physical premises. These are bankruptcy-specific measures; in corporate cases, the equivalent restraint usually arises from an injunction preventing certain actions, granted under the court’s general jurisdiction rather than under powers within the IA86 itself.
Recovery actions
Collecting records and information pertaining to an insolvent estate is crucial to understanding transactions and an insolvent’s dealings, which may underpin and form the basis of actions available to seek recoveries for the estate.
Where a director has misapplied or retained company property or breached their duties, misfeasance proceedings under Section 212 can be initiated. Section 213 (fraudulent trading) and Section 214 (wrongful trading) provide mechanisms for the court, on application of the officeholder, to order compensation to be paid in a corporate insolvency.
Sections 238 (transactions at an undervalue) and 239 (preferences) in a corporate insolvency, and the respective personal insolvency equivalent provisions in Sections 339 and 340, together with Section 423 (transactions defrauding creditors – applicable to both corporate and personal insolvency), all provide insolvency-specific rights of action to unwind transactions entered into against parties who have benefited from the same.
The ability to bring all of the above claims is subject to the specific facts of any matter, and accordingly information-gathering powers are crucial to be able to properly assess whether the requisite criteria of a particular action exist and to be able to particularise the relevant facts.
Summary
In our experience, to make effective use of the toolkit of powers available to officeholders requires early planning and ongoing review. When investigating a company’s or an individual’s affairs, officeholders should consider the following:
- whether voluntary cooperation is likely at the outset, or whether the assistance of the court will be required to compel cooperation
- how any request for documents or information is framed, so that it demonstrates that what is sought is reasonably required
- whether there is a real risk of asset dissipation, or of an individual absconding, which may warrant urgent protective steps
- whether the facts uncovered support, or with additional information may support, recovery actions.
