Liquidators cannot simply demand everything: two recent cases remind us why

When liquidators step into a company with no employees, no documents, and no institutional memory because everything was outsourced to a sister company under a services agreement, the temptation is understandable: ask for everything immediately and let the respondent work out what is relevant.

That is precisely what the joint liquidators of Eversholt Rail (365) Limited did. In two successive judgments, the courts refused to accommodate them. ICC Judge Burton dismissed the application at first instance in Webb v Eversholt Rail Ltd [2024] EWHC 2217 (Ch), and Sir Anthony Mann dismissed the appeal in [2026] EWHC 101 (Ch).

“It would be a rare case indeed where a liquidator needed to see everything.” — ICC Judge Burton, [2024] EWHC 2217 (Ch)

The core legal principle is well established. Section 235 is explicit: the office-holder is entitled to information they “reasonably require.” Section 236 imports the same standard through case law, most authoritatively through Lord Slynn’s formulation in Re British and Commonwealth Holdings [1993] AC 426. Neither section confers a blank cheque.

What these cases add is a careful dismantling of an argument that has obvious intuitive appeal: that where all of a company’s documents are held by a third party, by design through a group services arrangement, the liquidators are entitled as of right to demand the lot because reconstituting the company’s knowledge is itself a sufficient basis for the request.

Sir Anthony Mann rejected this squarely in the 2026 judgment. Reconstituting corporate knowledge, he held, is a purpose underlying the sections, not a substitute for the reasonable requirement test. Pointing to the need to reconstitute is not sufficient. Liquidators must show, on the facts, why they reasonably require what they are asking for. “Everything forever” is not an entitlement; it is, at best, a conclusion that might follow from a properly evidenced case.

“Reconstituting corporate knowledge is a purpose, not a sufficient threshold.” — Sir Anthony Mann, [2026] EWHC 101 (Ch)

There is also a practical lesson about how liquidators conduct themselves before reaching court. Both judges noted that the respondent had spent years offering to cooperate with focused requests and suggesting meetings to narrow the issues. Those overtures were declined. That conduct did not go unnoticed.

The cases do not say that a wide order can never be justified in unusual structural circumstances. They say that if you want one, you must make the case for it: with evidence, with reasons, and with a properly framed application.

KEY TAKEAWAYS

The reasonable requirement test applies to both sections 235 and 236 and cannot be bypassed by invoking reconstitution alone.

Evidence must explain why particular documents are needed, not merely that they exist or would be useful.

Engaging constructively with respondents before issuing proceedings is not just courteous; it affects the court’s assessment of whether an application was necessary at all.

If narrower relief is wanted as a fallback, it must be properly framed and argued as an alternative, not left implicit in a draft order.

These decisions will matter wherever insolvency practitioners face the increasingly common situation of a target company with outsourced functions and fragmented records. The message is clear: focus your application, explain your requirements, and engage early.