The applicants in Closegate Hotel Development (Durham) Limited & Anor v McLean & Ors  EWHC 3237 (Ch) were companies that had borrowed money off Barclays Bank to finance a hotel venture. That funding was secured by floating charges granted by the companies.
The companies encountered difficulties in repaying the debt that was owed. They entered into protracted negotiations with the Bank as to settlement of the debt by way of an alternative lender. Eventually, and after serving a letter of demand, the Bank appointed administrators. The companies considered that there had been a mutual understanding that the Bank would not enforce its security without giving the companies reasonable notice and that therefore the Bank was estopped from appointing administrators.
The applicant companies sought a declaration that the purported appointment of the administrators was invalid and of no effect. They challenged the validity of the appointments on the basis that the UK Insolvency Act 1986 prohibits the appointment of an administrator while a floating charge is not enforceable. The companies contended that the charges were not enforceable because the Bank was estopped from making an immediate demand for repayment of the monies owing to it or from exercising any of the rights under its security.
The court rejected the argument of the companies, as they could not establish that any of the Bank's statements or conduct amounted to a clear and unequivocal representation that the Bank would not enforce its rights to repayment of the companies' debt.
See Court decision here.