[1] An official receiver was appointed to pursue the former directors of the Anglo-Austrian Printing & Publishing Union for misfeasance, and other funds.

Vaughan Williams J held, reluctantly, that money recovered during liquidation from in proceedings under section 10 of the Companies (Winding-up) Act 1890 (53 & 54 Vict.

c. 63) and by calls on contributories, belong to debenture holders charging all the undertaking and property of the company, when total assets are not enough.

In this state of things a claim often arises against officers and promoters of the company in respect of what is a fraud not only on the company, but on the unsecured creditors, and the debenture-holders are so connected with the officers or promoters that they often step in when proceedings are threatened and say, “We do not think it is worth while to go to the expense of taking proceedings to recover anything from the officers or promoters; and, moreover, the estate is ours, and we do not assent to other persons enforcing the claim.” I say this is an unwholesome state of things; and I hope the time will come when funds arising from proceedings for misfeasance will not be chargeable in favour of debenture-holders, but will be free from the debentures and available for the benefit of the unsecured creditors.

However, in Re Yagerphone Ltd [1935] 1 Ch 392 the opposite conclusion was reached in relation to the proceeds of any action by the liquidator to set aside a transaction as an unfair preference.