In NOAL SCSp v Novalpina Capital LLP [2025], the court took a strict view of the statutory requirement that companies entering a member’s voluntary liquidation (MVL) must be able to pay all their debts (including contingent or disputed ones) within 12 months.

That mattered because, in practice, some insolvency professionals understood the legislation to mean that if the company was balance sheet solvent and able to pay its debts, they did not need to be actually paid before the end of 12 month. 

This report was therefore commissioned by the Insolvency Service in response to Novlapina to

  • Better understand the potential impact of the ruling on MVL practice; and
  • To explore and understand the MVL landscape more generally, with particular focus on the efficiency and effectiveness of MVLs

The report looked at over 2,300 MVLs between 2016 and 2024 and in summary found that MVLs are working well.

  • Creditors get paid (almost always in full) – 95% of cases are paid within 12 months
  • Members typically receive what they were expecting
  • Conversions to CVL are rare (only 0.3% of cases)
  • Costs are proportionate
  • Misuse is rare. 

This is interesting when there was so much initial concern following Novalpina that the ruling ‘contradicts the long-standing approach taken by much of the insolvency profession’ (Joint RPB Statement, 2025).

The Novalpina appeal was expected to be heard last week (after the report was published). It would therefore be natural to assume – in light of the findings that most MVL debts are paid within 12 months – that the appeal court may not interfere with the findings of the judge at first instance in relation to the 12-month rule.

That said, the appeal is still likely to be of interest because we understand that the court will also consider how to deal with contingent/disputed debts.  Given the possibility that the quantum of such claims (and time to pay them) may not be achievable within 12 months, particularly if a claim is notified to the MVL liquidator towards the end of that period, the outcome of the appear remains topical.