Government Study Validates MVL Process with 95% Creditor Payment Rate in 2,309 Cases

The Insolvency Service has published its first large-scale analysis of Members' Voluntary Liquidations (MVLs), examining 2,309 cases between 2016 and 2024 and finding that the process achieves its core objective of paying creditors in full in almost all instances.^[1]

The government study^[1], published on 18 June 2026, found that creditors were paid in full within 12 months in 95% of closed MVL cases examined, with scenarios where creditors remained unpaid beyond 12 months found to be rare.^[1] Only seven out of 2,309 cases converted from MVL to Creditors' Voluntary Liquidation (CVL), and one of these resulted in a director disqualification.^[1]

The research was commissioned to improve understanding of the MVL landscape and to assess the potential impact of a recent High Court ruling which interpreted the law to require that all creditors and interest be paid within 12 months of an MVL's commencement.^[1] The case is currently subject to appeal.^[1]

What the Study Reveals About MVL Practice

A Members' Voluntary Liquidation is a formal process used by solvent companies that have reached the end of their useful life and to ensure they can close in an orderly way, while paying all creditors in full.^[1] MVLs are administered by regulated insolvency practitioners.^[1]

The study represents the first large-scale analysis of MVL outcomes in England and Wales.^[1] Claire Hardgrave, the Insolvency Service's Co-Director for Strategy, Policy and Analysis, said: "This research provides the clearest picture to date of how Members' Voluntary Liquidations operate in practice. The findings show that MVLs play an important role in the economy, with creditors being paid in full in almost all cases."^[1]

The seven conversions from MVL to CVL out of 2,309 cases (approximately 0.3%) suggest that companies entering the MVL process are genuinely solvent, with very few subsequently proving unable to meet their obligations.^[1] The single director disqualification among converted cases indicates regulatory mechanisms are functioning to identify misconduct in the rare instances where MVLs fail.^[1]

Legal Context and Timing

The study's timing reflects both ongoing policy interest in MVLs and uncertainty created by recent case law. The High Court ruling requiring all creditors and interest to be paid within 12 months of commencement has created potential compliance concerns for practitioners, though the case remains under appeal.^[1]

The 95% payment-within-12-months finding provides empirical evidence that the vast majority of MVLs already meet this standard in practice, suggesting the ruling may formalise existing norms rather than require widespread operational changes.^[1]

What the Study Does Not Address

While the research validates MVL effectiveness in paying creditors, it does not examine several aspects of the MVL landscape that may merit further analysis. The published summary does not include breakdowns by sector, company size, or practitioner firm, nor does it address the proportion of MVLs that arise from succession planning versus retirement versus other business exits.

The study period (2016-2024) encompasses the Covid-19 pandemic, during which MVL activity may have been affected by temporary insolvency measures and changed business conditions. The published summary does not indicate whether pre-pandemic, pandemic, and post-pandemic periods were segmented separately.

Implications for Practice

The findings provide empirical support for MVLs as a functioning component of the UK's corporate exit infrastructure. The 95% success rate in paying creditors within 12 months, combined with the minimal conversion to CVL, suggests the statutory declaration of solvency required to commence an MVL effectively screens out financially distressed companies.^[1]

For insolvency practitioners, the data may inform discussions around the High Court ruling on 12-month payment requirements. If 95% of cases already achieve this standard, the ruling may represent a codification of existing practice rather than a disruptive change to operational norms.^[1]

The research was published on 18 June 2026 and updated on 19 June 2026.^[1] The Insolvency Service has made the full statistical review available alongside the press release.^[1]