The Facts

An administrator was appointed over a company out of court and the administration extended on a handful of occasions. The administrator was then replaced by block transfer, but the administration subsequently expired before it was concluded.

The new administrator therefore applied for a new administration order to apply retrospectively from the date of expiry of the old order.

The court was satisfied that the new administrator had standing to apply for an administration order as a creditor for unpaid fees. The court was also satisfied that there was grounds for making the new administration order, the company still being insolvent and the statutory purpose still being achievable.

What exercised the Judge was whether he could make an administration order with retrospective effect.

Decision

On the facts of this case, the Judge identified that certain creditors would be prejudiced as to interest if a retrospective order was made and it did not appear that this would be offset by increased recoveries. In light of these uncertainties, the new administrator withdrew the application for a retrospective administration order and the Judge did not have to decide the issue, simply making a prospective administration.

Whilst the Judge cited authority to make a retrospective administration order, he said those authorities needed to be treated with caution and each case assessed on its own facts.

In the matter of Elgin Legal Limited [2016] EWHC 2523 (CH)