On 21 August 2025, what is said to be the UK’s third-largest steelworks, Speciality Steel UK Limited (SSUK), has been put into liquidation by order of the High Court.
According to the BBC,[1] creditors are owed hundreds of millions of pounds by SSUK, which is part of the Liberty Steel metals empire of Sanjeev Gupta. The UK government has agreed to cover the ongoing wages of the nearly 1,500 workers and the on-going costs of the plant while a buyer is sought.
As has happened in past similar cases, on the application of the Official Receiver, the Court has also appointed Special Managers of the company in order to assist the Official Receiver with the liquidation.
The Official Receiver became the liquidator of SSUK as a matter of law, pursuant to section 136 of the Insolvency Act 1986. English law has the benefit of an Official Receiver, not only to handle smaller assetless estates but also to take on liquidations involving particular risk or public interest issues.
In contrast, Australia has no official receiver in corporate insolvency (in contrast also to New Zealand and Singapore, for example), a 1908 Companies Bill providing for such a role not proceeding because of an adverse view from the High Court as to the limits of the Commonwealth’s corporation power.[2] As a consequence, a significant number of insolvent companies are said to simply avoid the cost of the liquidation process by going through default registration.[3] As well, there have been situations where the financial and other risks involved in the appointment have been a potential difficulty in having a private liquidator consenting to be appointed.[4]
These issues were discussed in my
- “National interest insolvencies” – creditors vs the public interest? – Murrays Legal.
- Insolvency disclaimer or state control – furnaces and coke ovens, pyrophoric iron sulphide and methane, effluent lagoons and asbestos … – Murrays Legal
The lack of an official receiver in Australia is part of a wider issue as to the limited role of government in the insolvency process, a process that is inherently lacking in funds to support it. The need for an official receiver in personal insolvency has always been accepted without question.
The PJC considered submissions on this issue[5] from Jason Harris and I,[6] and others, and deferred consideration of it to a more comprehensive review.[7]
Getting back to the UK, a special manager is appointed under s 177 of the Insolvency Act 1986, on the application of a liquidator where it appears that “the nature of the business or property of the company etc … require the appointment of another to manage the company’s business or property”. The special manager then has such powers as may be entrusted by the court.
British Steel and others
With the liquidation of SSUK having just commenced, it is useful to examine the liquidation of British Steel, where the Official Receiver was also appointed. As explained by Keay and Walton, while official receivers are ‘civil servants’ before they are appointed, they cease, when appointed ‘to be civil servants in the proper sense of servants of the Crown employed in the business of government within (in this case) a department of state.’: Re Minotaur Data Systems Ltd [1999] 2 BCLC 766 at 772, per Aldous LJ.
This involved the hazards of furnaces and coke ovens, pyrophoric iron sulphide and methane, effluent lagoons and asbestos creating extreme environmental and health risks[9] Due to these risks, neither Ernst & Young, which had been advising the asset-based lenders, nor PwC, which had been advising British Steel, were prepared to accept appointment as administrators.
Immediately after the winding-up order was made, the OR applied for the
appointment of special managers. The OR’s request was on the grounds that the OR’s office did not itself have either the necessary expertise or manpower to cover the various tasks likely to be necessary in the liquidation: see British Steel: is it a wind up? 2019.
A very different but comparable public interest liquidation was that of the travel group, Thomas Cook.[8] One significant public interest element was that at the time of its collapse into liquidation, around 145,000 of the Thomas Cook group’s UK customers were abroad on holiday and would need to be repatriated, co-ordinated by the Civil Aviation Authority (CAA), with the assistance of the Official Receiver and the special managers. It was estimated that those customers were staying at around 3,000 foreign hotels. The repatriation exercise was said to be the largest such exercise which the CAA had ever undertaken.
Another example is Carillion Constructions, which had extensive government contracts for the construction of schools and hospitals.[10]
Australia
Given the absence of an official liquidator in Australia and the fact that our insolvency law does not allow for a liquidation of a company without a consenting liquidator, comparable environmental or public interest insolvencies to those in the UK may have to be confronted.
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[1] UK’s third-largest steelworks collapses into government control
[2] Huddart, Parker & Co Pty Ltd v Moorehead [1909] HCA 36; (1909) 8 CLR 330.
[3] 2023 PJC Report on Corporate Insolvency
[4] In the context of an attempted disclaimer, see Australian Sawmilling Co Pty Ltd (in liq) v Environment Protection Authority [2021] VSCA 294
[5] PJC Submission 18 – Inquiry into Corporate Insolvency in Australia, 30 November 2022
[6] See Rebuilding the structure of the Australian insolvency system, Murray and Harris, (2022) 22(1&2) INSLB 14.
[7] 2023 PJC Report rec 18.
[8] Thomas Cook Group Plc & Ors, Re [2019] EWHC 2626 (Ch) (23 September 2019)
[9] See British Steel — is it a wind up? Corporate Rescue and Insolvency August 2019, A Keay and P Walton.
[10] See Rebuilding the structure of the Australian insolvency system, Murray and Harris, (2022) 22(1&2) INSLB 14 at 16. Also https://commonslibrary.parliament.uk/research-briefings/CBP-8206/
