The liquidation of a property company
A company, which operated as a letting agent for domestic properties until its voluntary liquidation, disclaimed its interest in numerous properties in its name. The company had bought the properties using funds provided by a number of individuals that had invested in the company. The money paid by the individuals was to purchase rental properties and provide working capital. The properties were registered in the name of the company but charged in favour of the individuals.
As the property market declined, the Liquidator judged that the value of the properties was lower than the value of the charges and they were onerous. The alternatives facing the individuals were to repossess the properties as mortgagees in possession, or to seek an order vesting the properties in them.
To repossess the properties would be costly, time consuming and result in a significant shortfall to the individuals if the properties could be sold. In the circumstances we got a court order that ownership of the properties be vested in the individuals. The simple effect of the order changed the identity of the legal owner from the company to an individual. There were several individuals and numerous properties, but as legal owners of the properties, rather than charge holders, the indivduals could now deal with the properties as they wished.
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