---
title: "Can a Liquidator Sue After Six Years? THG v Zedra Explained"
url: https://lexlaw.co.uk/solicitors-london/can-a-liquidator-sue-after-six-years-thg-v-zedra-explained/
date: 2026-10-16
modified: 2026-10-16
lang: en
author: "LEXLAW Solicitors & Barristers"
description: "On 25 February 2026 the Supreme Court held in THG v Zedra that unfair prejudice petitions have no statutory limitation period. The majority also said the six-year rule for section 238, 239 and 423 claims was wrongly decided. We explain what this means for directors facing liquidator claims and the defences that remain."
categories:
  - "Director's Liability"
  - "Insolvency"
  - "Litigation"
tags:
  - "Directors’ Defence"
  - "Limitation Period"
  - "Liquidator Claims"
  - "litigation funders"
  - "Manolete Partners"
  - "Section 238 Insolvency Act"
  - "Section 239 Preference"
  - "Section 423 Claims"
  - "THG v Zedra"
  - "Transaction at Undervalue"
  - "unfair prejudice petition"
image: https://lexlaw.co.uk/wp-content/uploads/liquidator-claim-limitation-period-thg-v-zedra-1024x538.webp
word_count: 2608
---

# Can a Liquidator Sue After Six Years? THG v Zedra Explained

**Yes, a liquidator may now be able to sue you more than six years after the transaction. On 25 February 2026 the Supreme Court held in THG v Zedra that unfair prejudice petitions have no statutory limitation period, and the majority added that the earlier cases applying a six-year limit to claims under sections 238 to 241 and section 423 of the Insolvency Act 1986 were wrongly decided. Until an appellate court revisits the point, the old six-year rule for transactions at an undervalue, preferences and transactions defrauding creditors cannot be relied on.**

The question usually comes from a director who has received a letter from a liquidator, or from a litigation funder acting for one, about a payment made eight or ten years ago. It surprises people because the six-year figure was repeated in letters before claim for more than twenty years. [Our director's guide to defending claims brought by liquidators](https://lexlaw.co.uk/solicitors-london/practice-areas-defending-claims-brought-by-liquidators/) covers the claims themselves; what follows deals with the time limits.

## What limitation period applied to liquidator claims before THG v Zedra?

Section 9(1) of the Limitation Act 1980 provides that "an action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued". For more than two decades the courts treated applications under sections 238, 239 and 423 as that kind of action, so the working rule was six years, generally taken to run from the start of the liquidation because the liquidator cannot apply before then. The wider scheme of the Act is set out in [our overview of limitation periods](https://lexlaw.co.uk/limitation-periods-time-limits-bar-statute-expired-start-claim-litigation-legal-advice/).

The rival argument, that these were "actions upon a specialty" attracting twelve years under section 8(1), gained ground after the Court of Appeal applied twelve years to a section 994 petition in 2024, which we reported in [our report on the Court of Appeal's 2024 ruling on section 994 petitions](https://lexlaw.co.uk/solicitors-london/court-of-appeal-decides-s994-petitions-subject-to-statutory-limitation-period/). The Supreme Court has now removed both periods for unfair prejudice petitions and, in doing so, has undermined the six-year rule for insolvency claims.

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## THG v Zedra: what the Supreme Court actually decided

THG plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6 concerned a petition under section 994 of the Companies Act 2006, which allows a member to complain that "the company's affairs are being or have been conducted in a manner that is unfairly prejudicial". By four to one the court held that neither section 8 nor section 9 of the Limitation Act 1980 applies to such a petition. We explain the shareholder consequences in [our 2026 guide to unfair prejudice petitions](https://lexlaw.co.uk/solicitors-london/unfair-prejudice-petitions-a-complete-2026-guide-for-shareholders/) and the procedural effect in [our guide to bringing a section 994 petition](https://lexlaw.co.uk/solicitors-london/unfair-prejudice-petition-procedure-how-to-bring-a-section-994-claim/).

Two strands of reasoning matter here. At paragraphs 114 to 116 the majority held that "it is of the essence of an action upon a specialty that it is an action to enforce an obligation", and that sections 994 to 996 "neither contain nor enforce obligations". At paragraph 155 the majority added that "claims under statutory provisions which confer a wide discretion as to remedy are not claims to which section 9 applies". That second proposition reaches the claims described in [our guide to the claims liquidators bring against directors](https://lexlaw.co.uk/solicitors-london/practice-areas-defending-claims-brought-by-liquidators/).

## Why the ruling reaches section 238, 239 and 423 claims

In the same paragraph the majority said that the earlier decisions on these insolvency claims "were wrongly decided as regards section 9", and the statutory words show why. Under section 238(3) "the court shall, on such an application, make such order as it thinks fit for restoring the position to what it would have been if the company had not entered into that transaction"; section 239(3) uses the same formula for preferences; and section 423(2) provides that "the court may, if satisfied under the next subsection, make such order as it thinks fit". We set out how these claims are pleaded in [our guide to defending transaction at an undervalue claims](https://lexlaw.co.uk/expert-legal-defence-against-manolete-transactions-at-an-undervalue-claims/) and, for section 423, in [our analysis of the failed liquidator's claim in Purkiss v Kennedy](https://lexlaw.co.uk/solicitors-london/tax-avoidance-vs-asset-concealment-purkiss-v-kennedy-limits-hmrcs-insolvency-powers/).

Two cautions apply. The majority recorded at paragraph 117 that "we have not been invited to overrule those cases", so the earlier authorities stand until a court applies the Supreme Court's reasoning to them directly. A High Court Master did so in May 2026, observing in passing that a section 423 claim is neither an action upon a specialty nor an action to recover a sum recoverable by virtue of an enactment. That remains a first-instance observation, although litigation funders, whose approach we describe in [our guide to defending claims funded by Manolete Partners](https://lexlaw.co.uk/solicitors-london/legal-guide-to-defending-claims-from-manolete-partners/), are already pleading it as settled law.

## Six years, twelve years or no limit? Where each claim now stands

For section 423 the position is clearest: the court "may" make an order and the remedy is wholly discretionary. For sections 238 and 239 the word is "shall", and some commentators consider that the mandatory wording leaves room to argue that a fixed period still applies. Our view is that the remedy under both sections remains "such order as it thinks fit", so a defendant should not rest on the six-year argument alone. The sums can be large, as [our case study of a director ordered to repay £0.9m for transactions at an undervalue](https://lexlaw.co.uk/solicitors-london/manolete-case-study-director-ordered-to-repay-0-9m-for-insolvency-duty-breach-transactions-at-undervalue/) and [our case study of a director ordered to repay a section 239 preference](https://lexlaw.co.uk/solicitors-london/manolete-case-study-director-ordered-to-repay-preferential-payment-s-239-insolvency-act-1986/) show.

Wrongful trading sits differently. Section 214(1) lets the court declare a director "liable to make such contribution (if any) to the company's assets as the court thinks proper", which is discretionary in form, but the claim is in substance for a sum of money and we continue to treat six years as the safer working assumption. Misfeasance under section 212 is a procedural route, and the time limit follows the underlying breach of the duties described in [our explanation of directors' duties once insolvency is in prospect](https://lexlaw.co.uk/solicitors-london/directors-duties-in-the-zone-of-insolvency-sequana/), so the same facts may be time-barred under section 212 and still open under section 238. [Our summary of post-insolvency claims against directors](https://www.windinguppetitionsolicitors.co.uk/post-insolvency-claims-against-directors/) sets out each head of claim.

## Look-back windows are not limitation periods: the confusion we see most often

The search that brings many directors to this page is "two years" or "six months", the periods in section 240. Under section 240(1)(a) a transaction at an undervalue, or a preference given to a connected person, is only caught if it took place "at a time in the period of 2 years ending with the onset of insolvency"; under section 240(1)(b) any other preference must fall within six months of that onset. Those windows decide which transactions can be attacked. A limitation period decides how long the liquidator then has to issue proceedings. A payment inside the window can be sued on many years later, a point made in [our guidance on personal risk for directors](https://www.windinguppetitionsolicitors.co.uk/risks-for-directors/) and [our guide to the impact of a compulsory winding-up order on directors](https://lexlaw.co.uk/solicitors-london/guide-impact-of-compulsory-winding-up-order-liquidation-on-directors/).

Section 423 has no look-back window at all. The applicant must prove the purpose in section 423(3), that the transaction was entered into "for the purpose of putting assets beyond the reach of a person who is making, or may at some time make, a claim against him" or "of otherwise prejudicing the interests of such a person", but the transaction can be of any age. Bankruptcy has its own windows in section 341(1): five years for a transaction at an undervalue, two years for a preference to an associate and six months for any other preference, each "ending with the day of the presentation of the bankruptcy petition", so the presentation date matters, as [our note on what an HMRC bankruptcy petition means for the debtor](https://taxdisputes.co.uk/2026/08/hmrc-bankruptcy-petitions-the-carragher-case/) explains.

## What this means if you are facing a liquidator or Manolete claim now

Litigation funders, whose claims against directors we record in [our Manolete Partners claim tracker](https://lexlaw.co.uk/solicitors-london/manolete-partners-claim-tracker-get-advice-on-your-case/), have every incentive to reopen files written off as time-barred. A director who settled a personal guarantee from company funds in 2017 or repaid a connected company's loan in 2018 should expect a liquidator appointed in 2026 to plead that no limitation period applies, and in a section 423 case that no look-back window applies either. Serial company failures are a particular target, as [our warning on phoenix companies and HMRC](https://taxdisputes.co.uk/2026/06/phoenix-companies-the-280000-hmrc-warning-for-directors/) explains.

Overdrawn loan accounts are the most frequent example. A debt owed by a director to the company is a simple contract debt, and section 5 of the Limitation Act 1980 provides that "an action founded on simple contract shall not be brought after the expiration of six years". A liquidator can often reframe the same facts as a preference or a transaction at an undervalue, and the limitation answer then changes with the label, as we explain in [our guide to overdrawn director's loan accounts](https://lexlaw.co.uk/overdrawn-directors-loan-accounts-companies-act-insolvency/) and in [our guidance on overdrawn loan accounts in insolvency](https://www.windinguppetitionsolicitors.co.uk/overdrawn-director-loan-account-insolvency-companies-act-liquidator-misfeasance-proceedings-representation-advice/).

## Defences that survive when limitation falls away

A claim that is in time still has to be proved. Under section 238(5) the court "shall not make an order" if satisfied that the company entered into the transaction "in good faith and for the purpose of carrying on its business" and that "there were reasonable grounds for believing that the transaction would benefit the company". Under section 239(5) a preference is only recoverable if the company "was influenced in deciding to give it by a desire to produce" the preferential effect, although section 239(6) presumes that desire where the recipient was connected with the company. These merits defences won in [our report of a director's successful defence of a £101k Manolete repayment claim](https://lexlaw.co.uk/solicitors-london/director-successfully-defends-101k-manolete-repayment-claim/).

Delay itself still matters. Section 36(2) of the Limitation Act 1980 preserves "any equitable jurisdiction to refuse relief on the ground of acquiescence or otherwise", and where the remedy is "such order as it thinks fit" the court can weigh stale evidence, lost documents and prejudice to the defendant. Section 241(2) protects a third party who acquired an interest "in good faith and for value". A director who complied years ago with the duties in [our guide to sections 235 and 236 of the Insolvency Act 1986](https://lexlaw.co.uk/solicitors-london/sections-235-and-236-insolvency-act-1986-directors-duties-to-co-operate-with-liquidators/) will at least have a record of what was disclosed.

## Liquidators, creditors and victims: can an old claim be revived?

The point can now be argued, and in section 423 cases the applicant class in section 424(1) includes a creditor acting as a victim with the court's leave. Even before 2026, section 32(1) of the Limitation Act 1980 postponed the start of the period where the action is "based upon the fraud of the defendant", where "any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant", or where it is "for relief from the consequences of a mistake". A letter of the kind described in [our guide to the letter before claim](https://lexlaw.co.uk/letter-before-claim-specialist-solicitors/) should plead those provisions alongside the Supreme Court's reasoning.

Creditors who suspect that an office-holder has let an old claim go, or compromised it cheaply, have a separate route in the claim described in [our guide to suing an administrator or liquidator for negligence](https://www.professionalnegligenceclaimsolicitors.co.uk/insolvency-practitioner-negligence-sue-an-administrator/), and the removal of the six-year defence makes a write-off on grounds of age harder to justify.

## Why waiting is dangerous on both sides

For a director who has received a letter, the loss of a statutory limitation period removes the one defence that could have ended the claim without any examination of the merits, so the response now has to engage with the facts from the outset. Documents from ten years ago are frequently gone, and the liquidator, holding the company's books, will usually have the better evidence. [Our report on the Supreme Court's ruling on how limitation periods are counted](https://lexlaw.co.uk/solicitors-london/beware-of-limitation-periods-supreme-court-clarifies-time-periods-for-litigation-claims/) shows how unforgiving the courts are about a single day.

For an applicant, the law is unsettled: the earlier cases were not overruled, a differently constituted court may give weight to the word "shall" in sections 238 and 239, and a claim issued after six years on the strength of Zedra alone risks a strike-out application and an adverse costs order. Issue within six years where you can, and use a standstill agreement where you cannot. A director who hopes to pass the loss to the accountant or solicitor who advised on the transaction faces the ordinary six-year period explained in [our guide to the limitation period in professional negligence claims](https://www.professionalnegligenceclaimsolicitors.co.uk/limitation-period-in-professional-negligence-claims/).

## How LEXLAW Can Help

We are dual-qualified solicitors and barristers with chambers in Middle Temple, next to the Royal Courts of Justice. Our insolvency team defends claims brought by liquidators, administrators and litigation funders under sections 238, 239, 423, 212 and 214 of the Insolvency Act 1986, and advises creditors and office-holders on whether an old transaction can still be pursued. We explain how funded claims are run in [our guide to litigation funding in liquidator claims](https://lexlaw.co.uk/solicitors-london/legal-guide-to-defending-claims-from-manolete-partners/).

We do not offer free legal advice or legal aid, and we generally act in matters where the sums claimed or the consequences for the director are substantial. The first step is a fixed fee advice conference with both a solicitor and a barrister, at which we review the letter before claim, the company's position at the date of the transaction and the limitation arguments, and tell you plainly where you stand. To start, complete [our case assessment form](https://lexlaw.co.uk/legal-case-assessment/).

### Check Your Litigation Case ✔

We analyse your case prospects. We deliver strategic legal advice at your first fixed fee meeting. We get optimal legal results. Want our opinion on your case? Click below or call our lawyers in London on [☎ 02071830529](tel:+442071830529)

[Check My Case ✔](https://lexlaw.co.uk/legal-case-assessment/)

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*This guide states the law of England and Wales as at 16 October 2026 and is not legal advice. The limitation position for Insolvency Act 1986 claims after THG v Zedra is unsettled and may change as further cases are decided. [Take advice](https://lexlaw.co.uk/legal-case-assessment/) on the facts of your own case before acting.*

### Frequently Asked Questions (FAQs)

Is there still a six-year limitation period for a section 238 transaction at an undervalue claim?
Probably not, although no appellate court has yet decided the point. The Supreme Court majority in THG v Zedra said at paragraph 155 that claims under provisions conferring a wide discretion as to remedy fall outside section 9 of the Limitation Act 1980, and section 238(3) directs the court to "make such order as it thinks fit".

How long does a liquidator have to bring a preference claim under section 239?
There is no longer a safe answer. The preference must fall within the look-back window in section 240(1), but the time the liquidator then has to issue proceedings depends on the Limitation Act 1980, and the Supreme Court has said the six-year period in section 9 was wrongly applied to these claims.

Does a section 423 claim have a limitation period?
On the current authorities, no. Section 423(2) provides that the court "may" make such order as it thinks fit, the discretionary remedy the Supreme Court said takes a claim outside section 9, and there is no look-back window either, so a transaction of any age can be challenged if the purpose in section 423(3) is proved.

What is the difference between the two-year look-back period and a limitation period?
The look-back period in section 240(1) of the Insolvency Act 1986 decides which transactions can be attacked at all, counting back from the onset of insolvency defined in section 240(3). A limitation period decides how long the liquidator has, once the right to sue arises, to start proceedings.

Did THG v Zedra change the limitation period for wrongful trading under section 214?
Not directly, and the safer assumption remains six years. Section 214(1) lets the court order "such contribution (if any) to the company's assets as the court thinks proper", which is discretionary in form, but the claim is for a sum of money and wrongful trading was not before the Supreme Court.