Less than you’d hope, if the company was already insolvent when you were pushed out and the sale was done by an independent liquidator. That’s the practical message of Padun v Dickinson [2026] EWHC 2308 (Ch) (listed on Find Case Law as Re The Interactive Media Group Ltd), a first instance decision of ICC Judge Barber handed down on 11 September 2026.
The assumption I hear from owners in this position is that if the old business is still trading under a former co-director, the value must have gone somewhere and a court will follow it. Sometimes it has. But you have to prove it, and in the right order, which is where this one came unstuck.
What happened
Interactive Media Group Ltd installed audio-visual equipment through a small group of subsidiaries. Mr Dickinson had been a director and shareholder since 2009; Mr Padun joined in 2017. By September 2021 the group owed around £370,000 to a lender and £255,000 in unpaid deferred consideration on an acquisition, with tax debts building up. A plan emerged to move two of the subsidiaries into the directors’ own names for nothing ahead of an expected liquidation, and filings were made at Companies House to that effect. It’s now common ground that they had no effect at all, so the parent still owned everything (Companies House records what it’s told; it doesn’t check that a transfer actually happened).
In March 2022 the two fell out and Mr Padun was excluded from management. The parent went into creditors’ voluntary liquidation that June. Over the following months Mr Dickinson bought subsidiary shares from the liquidator for £100 each, and later the goodwill and websites of the group companies. A subsidiary that hadn’t traded when it was set up now carries the business on. Mr Padun says it’s a phoenix of the old group; Mr Dickinson says he rebuilt it himself after the liquidations. None of that has been tried.
Shares in an insolvent company are usually worth nothing
The claim was an unfair prejudice petition under section 994 of the Companies Act 2006, where the usual remedy is an order that the other shareholder buys you out at a fair value. Because shares in an insolvent company are ordinarily worthless, the Court of Appeal said in Re Tobian Properties Ltd [2012] EWCA Civ 998 that a petitioner generally has to show either claims big enough to clear the deficit and leave a surplus, or that the shares would have had a value but for the wrongdoing. Here the court had already concluded in 2024 that the parent was cashflow insolvent on the day Mr Padun was excluded, and sent him away to plead a valuation.
If you can see a dispute with a co-owner coming and the company is struggling, the value of your position is falling month by month. That’s an argument for negotiating an exit while there’s still something to negotiate about.
Once a liquidator is appointed, your co-director isn’t running the company
In a creditors’ voluntary liquidation the directors’ powers cease when the liquidator is appointed, unless the creditors or a liquidation committee agree otherwise: section 103 of the Insolvency Act 1986. The judge held that, on this petition as drafted, what happened afterwards (the liquidator selling shares and goodwill, the subsidiaries going into liquidation, the other company trading) wasn’t Mr Dickinson conducting the parent’s affairs. He was a buyer dealing with a liquidator. If the real complaint is that the liquidator sold too cheaply, that’s a complaint about the liquidator, who wasn’t a party and against whom nothing was alleged.
The most useful point here is about timing. The sales didn’t happen overnight: the subsidiary shares went about three months after the liquidation, the parent’s goodwill about ten months after. Mr Padun was still a director and shareholder when the liquidator was appointed, and anyone can make an offer to a liquidator. The petition didn’t say he was prevented from bidding, or that he bid and was refused. So if you think a co-director is lining up to buy the business back cheaply, do something while the liquidator is still selling: ask what’s for sale and how it’s being marketed, make an offer, and put any objection in writing at the time.
If you’re the one buying back, note that Mr Dickinson needed permission under section 216 of the Insolvency Act 1986 to act as a director of a company using a name similar to that of one in insolvent liquidation, and got it retrospectively in January 2026, having traded since 2022. Breaching section 216 is a criminal offence and can leave you personally liable for the new company’s debts, so the exceptions and the permission route are better used before you start than four years in.
Disclosure will not find your case for you
The application the judge was actually dealing with was for documents. By the final hearing it ran to 735 items, 361 of them added after the court had told Mr Padun to narrow it. On the evidence summarised in the judgment, 315 concerned documents that didn’t exist and 217 concerned companies not covered by the pleaded case. An expert was said to have been instructed but never produced any evidence. The judge found the application had been pursued in a way that was unreasonable and vexatious, and dismissed it.
His case was that value was taken out after his exclusion, so those assets would still show up in the management accounts for the years before it, and those had already been handed over. Lawyers aren’t naturally restrained about asking for documents, as anyone who has been sent a due diligence questionnaire knows, and I’ve sent plenty. But a due diligence list is a negotiation between people who want to do a deal. In litigation you need the pleaded case first, then an expert who will put their name to a method, then the documents that method needs.
What to do if this is you
Get copies of the management accounts now, and make sure you can still get into the accounting software, because once the company is in liquidation the books belong to the liquidator and you’ll be asking him rather than your co-director. If assets are being marketed, deal with the liquidator in writing. And if you’re still on reasonable terms with your co-owner, a shareholders’ agreement dealing with exit, valuation and deadlock is far cheaper than any of this. I draft them for a living, so discount my enthusiasm accordingly, and be realistic: none of it makes an insolvent company solvent.
I help owner-managed businesses buy and sell companies, and I draft the shareholders’ agreements meant to stop arguments like this one; shareholder disputes go to my Nexa colleagues who litigate them day to day. Get in touch if you need some help.
Written by Steven Mather, a business solicitor acting on company sales and purchases. This is general information about the law, not legal advice on your situation.
Written by Steven Mather, a business solicitor acting on company sales and purchases. This is general information about the law, not legal advice on your situation.
