The English High Court in Powertrain Ltd, Re [2015] EWHC B26 considered the issue of whether a liquidator should be authorised to effect further distributions in favour of a company's known creditors without regard to possible further claims that could emerge against the company. 

The Court noted that there is a balance to be struck between the desirability of distributing assets to known creditors sooner rather than later and the potential injustice of leaving someone who has a valid claim with no effective remedy.

The Court held that the liquidator should be authorised to distribute in favour of the known creditors as:

  • The known creditors had been kept out of the available money for a consider period
  • Chances were remote that other creditors would come out of the woodwork (Powertrain had ceased trading more than nine years ago).

See Court decision here.