Jurisdiction(s):
United Kingdom

Key definition

Liquidation definition

What does Liquidation mean? Liquidation (statutory term: winding up) is the formal process for closing a company, under which a liquidator takes control, stops or sells the business, collects and realises assets, adjudicates creditor claims and distributes proceeds according to statutory priority, before dissolution. It is used both on insolvency (to repay creditors) and, in a solvent members’ voluntary liquidation (MVL), to return surplus to shareholders. In England & Wales and Scotland, liquidation is governed principally by the Insolvency Act 1986 and associated Rules. The main routes are compulsory liquidation (winding up by the court), creditors’ voluntary liquidation (CVL) and MVL. In Northern Ireland,...

Contribution notices and the Bonas pre-pack: Upper Tribunal’s approach to main purpose and reasonableness (quantum cut to £60,000)

Published by a LexisNexis Pensions expert

Practice notes

ARCHIVED: This archived Practice Note reviews the contribution notice issued by the Pensions Regulator to the overseas parent company of the loss‑making UK employer connected to the Bonas defined benefit pension scheme. Importantly, the contribution notice amount was cut from £5,089,000 to a markedly lower £60,000 when the parties reached a settlement following a summary hearing before the Upper Tribunal. The Pensions Regulator has cautioned that the judge’s remarks at that summary hearing about the appropriate level of a contribution notice are tied to the specific facts and context of the matter, and therefore should not be relied upon in other situations. This archived Practice Note is not maintained and is provided for background purposes only. For additional detail on contribution notices, see Practice Note: Contribution notices (CNs).

Facts

Michel Van de Wiele (VDW) was the Belgian parent company of Bonas Machine Company Ltd (Bonas), which was the sole employer supporting the Bonas Group Pension Scheme (the Bonas Scheme). From VDW’s takeover of Bonas through to its eventual liquidation, Bonas operated at a loss and was only able to continue trading due to VDW’s financial support...

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Web page updated on 21/05/2026

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