Key Points

  • An administrator may be able appeal an order restoring a company following dissolution
  • The court has jurisdiction to backdate a winding up order made following restoration to the date of dissolution
  • The court must exercise its discretion to do so with extreme caution

The Facts

Client Connection Limited (“Company”) was placed into administration and Ms Sharma (“A”) was appointed as administrator. Following a pre-pack sale of the business of the Company, A moved the Company to dissolution.

Barclays, a creditor of the Company, discovered that large sums of money had been paid out by the Company prior to administration and applied for the Company to be restored and immediately wound up so that a liquidator could investigate the payments. Barclays also requested the petition be backdated to the date of administration or dissolution so that the payments fell within the relevant challenge periods. The petition made clear that Barclays was not satisfied with the way A had conducted the administration.

The Decision

The Court noted that “any person appearing to have an interest in the matter” may apply for restoration of a company and appeared to hold that the same category of persons could apply to challenge a restoration order. Given that the winding up petition criticised A’s conduct, the Court held that A had sufficient interest to apply to set aside the restoration order. The Court, however, refused to grant an order on the basis that it had been just to make the original restoration order given the limited investigations carried out by A.

In terms of backdating, the Court held that there was jurisdiction to do so, however, would not exercise that discretion as the recipients of the payments had not been put on notice of the application and Barclays had not acted promptly to e.g. suspend the dissolution.

Comment

This case highlights that creditors must act quickly if they consider there are further investigations for an office holder to carry out as waiting to restore the company following dissolution may be too late.

Barclays Bank Plc v Registrar of Companies & ors