Companies Act 1985

623 Effect of diligence within 60 days of winding up

(1) The following applies in the case of the winding up of a company registered in Scotland.

(2) The winding up is equivalent as at the date of its commencement, to an arrestment in execution and decree of furthcoming, and to an executed or completed poinding; and—

(a) no arrestment or poinding of the funds or effects of the company executed on or after the 60th day prior to that date is effectual, and

(b) those funds or effects (or their proceeds if sold) shall be made forthcoming to the liquidator:

But any arrester or poinder before that date who is thus deprived of the benefit of his diligence has preference out of those funds or effects for the expense bona fide incurred by him in the diligence.

(3) As at the date of its commencement, the winding up is equivalent to a decree of adjudication of the heritable estates of the company for the payment of its whole debts, principal and interest, accumulated at that date, subject to such preferable heritable rights and securities as existed at that date and are valid and unchallengeable, and the right to poind the ground provided below in this section.

(4) Sections 108 to 113 and 116 of the [1913 c. 20.] Bankruptcy (Scotland) Act 1913 apply (so far as is consistent with this Act) to the realisation of heritable estates affected by such heritable rights and securities as are mentioned above ; and for the purposes of this Act those sections are modified as follows—

(a) " sequestration" and " trustee" mean respectively " winding up " and " liquidator ", and

(b) " the Lord Ordinary or the court " means " the court " as defined by this Act with respect to Scotland.

(5) No poinding of the ground which has not been carried into execution by sale of the effects 60 days before the date of commencement of the winding up is available (except to the extent provided below) in any question with the liquidator.

However, no creditor who holds a security over the heritable estate preferable to the right of the liquidator is prevented from executing a poinding of the ground after that date; but that poinding is, in competition with the liquidator, available only for interest on the debt for the current half-yearly term, and for arrears of interest for one year immediately before the commencement of that term.

(6) This section, so far as relating to any estate or effects of the company situated in Scotland, applies in the case of a company registered in England as in the case of one registered in Scotland.