Remedy
Start free

Section 178: Power to disclaim onerous property.

Insolvency Act 1986 · 1986 c. 45View on legislation.gov.uk

Part IV: Winding Up of Companies Registered under the Companies Acts — Chapter VIII: Provisions of General Application in Winding Up

This and the next two sections apply to a company that is being wound up in England and Wales.

Subject as follows, the liquidator may, by the giving of the prescribed notice, disclaim any onerous property and may do so notwithstanding that he has taken possession of it, endeavoured to sell it, or otherwise exercised rights of ownership in relation to it.

The following is onerous property for the purposes of this section—

any unprofitable contract, and
any other property of the company which is unsaleable or not readily saleable or is such that it may give rise to a liability to pay money or perform any other onerous act.

A disclaimer under this section—

operates so as to determine, as from the date of the disclaimer, the rights, interests and liabilities of the company in or in respect of the property disclaimed; but
does not, except so far as is necessary for the purpose of releasing the company from any liability, affect the rights or liabilities of any other person.

A notice of disclaimer shall not be given under this section in respect of any property if—

a person interested in the property has applied in writing to the liquidator or one of his predecessors as liquidator requiring the liquidator or that predecessor to decide whether he will disclaim or not, and
the period of 28 days beginning with the day on which that application was made, or such longer period as the court may allow, has expired without a notice of disclaimer having been given under this section in respect of that property.

Any person sustaining loss or damage in consequence of the operation of a disclaimer under this section is deemed a creditor of the company to the extent of the loss or damage and accordingly may prove for the loss or damage in the winding up.

About this text

This legislation text comes from legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. These source and reuse terms cover the legislation text, not Remedy's commentary.

Reuse reviewed 21 August 2026 under Open Government Licence v3.0.