Powertrain Ltd ((in Liquidation))

JurisdictionEngland & Wales
CourtChancery Division
JudgeMr Justice Newey
Judgment Date02 November 2015
Neutral Citation[2015] EWHC B26 Ch
Docket NumberCase No: 9361 of 2008

[2015] EWHC B26 (Ch)




Birmingham Civil & Family Justice Centre

Priory Courts

33 Bull Street


B4 6DS


Mr Justice Newey

Case No: 9361 of 2008

In the Matter of:

Powertrain Limited (In Liquidation)

Mr Daniel Bayfield and Miss Charlotte Cooke (instructed by Linklaters LLP) for the liquidators of Powertrain Limited

Mr Justice Newey

I have before me an application brought by the liquidators of Powertrain Limited.


Powertrain sits within the wider group of companies in the business of vehicle manufacture that includes the well known company MG Rover Group Limited, which was the main trading company in the group. Powertrain itself undertook the design, manufacture and sale of engines and gear boxes. Many of its products were sold to MG Rover Group, but it also supplied other manufacturers.


Both MG Rover Group and Powertrain, the company with which I am concerned, went into administration in April 2005. On 22 July of that year, the administrators entered into a contract for the sale of the majority of Powertrain's assets to Nanjing Automobile (Group) Corporation. At that point Powertrain's activities were curtailed to a substantial extent, but it continued to effect sales until February 2006. It went into creditors' voluntary liquidation on 20 March 2006.


The present position is that the liquidators hold a balance of £10.5m. No further realisations of significance are expected to be made other than by way of dividends on the company's claim in the liquidation of MG Rover Group. Some such receipts are anticipated, but perhaps not for some time yet.


The question with which I am concerned today is whether the liquidators should be authorised to effect further distributions in favour of Powertrain's known creditors without regard to claims that, at least in theory, could yet emerge against the company. A particular concern in that regard is that claims could in principle arise in relation to the period between Powertrain entering into administration and its ceasing to trade in February of the following year. Were a claim to be made in respect of that period, it would represent an administration expense and so rank in priority to claims in the liquidation.


As, however, is apparent from the evidence before me and has been bought out by the submissions to me of Mr Daniel Bayfield, who appears with Miss Charlotte Cooke for the liquidators, the chances of further claims emerging against Powertrain are remote. Powertrain ceased to trade more than nine years ago. To date, no proofs have been lodged in the company's liquidation or otherwise notified to its office holders in respect of product liability claims. No notifications made against the wider group relate to post-appointment supplies which could potentially give rise to expense liabilities. None of the 120 product liability claims notified under the group's insurance policy since 2000 has been made against Powertrain itself. Of the 93 claims that have not been settled, only 36 could, on their face at least, relate to Powertrain products, and all of these both relate to events before administration and appear to have been abandoned or be dormant. None of the 27 claims that have been settled by a member of the group or its insurers has been attributed to Powertrain.


Taking those matters together with the lapse of time, which of course stands to give rise to limitation issues, it is indeed the case, it seems to me, that there is little chance of a claim against Powertrain emerging now. That being so, I agree with Mr Bayfield that there is a strong case for the liquidators proceeding to make distributions without regard to...

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