Quantum Distribution (UK) Ltd

[1] I have prepared this opinion in the hope that its publication will discourage a repetition of the unacceptable events which occurred in the winding up of Quantum Distribution (UK) Ltd ("Quantum"). I am sending copies of this opinion to the Insolvency Practitioners' Association and the Law Society of Scotland to promote that result.

[2] The court only learned of the events after the Auditor of the Court of Session raised with me the concerns which he and the court reporter had about the way in which the liquidator had bypassed the court to obtain his remuneration for this winding up in the face of a very critical report from the court reporter. I had the case put out by order and counsel were asked to respond to questions which I raised. Their response and the documents which they provided gave rise to additional questions and I had a further by order hearing at which counsel addressed me on those questions.

[3] Counsel accepted that mistakes had been made and apologised on behalf of their clients. Both stated that lessons had been learned from their examination of the events in response to the court's challenge.

[4] On 18 December 2007 Irvine Estates Limited (IEL), which was the landlord of warehouse premises in Irvine that Quantum rented, presented a petition to wind up Quantum. On 16 January 2008 Lord Glennie pronounced the winding up order and appointed Kenneth W Pattullo of Begbies Traynor ("Mr Pattullo") as interim liquidator.

[5] On 15 February 2008 the court extended the time in which the interim liquidator could summon and hold a meeting of creditors. Thereafter, at the first meeting of creditors on 25 April 2008 Mr Pattullo was appointed liquidator of Quantum. A liquidation committee was established but it was disbanded on 1 May 2008 because a potential conflict of interest had been identified within the membership of the committee.