CMS Cameron McKenna has learned that Registrars at the Companies Court in London have indicated that they now require applications for the extension of an administration to be issued at least 6 weeks before the administration is due to expire, unless there are "unusual reasons" justifying a later application. It is not yet clear what "unusual reasons" might mean in practice.

This 6 week requirement represents an increase from the 4 week period which the Companies Court Registrars had previously required. The purpose is to give the Court time to decide whether to deal with the application on paper or to list a hearing. The requirement appears to be a reaction to the tendency for applications to be filed so late that the necessary haste with which they are heard causes unwelcome disruption to the Court’s schedule.

The potential sanction for failure to comply with the 6 week deadline (which has already been applied in practice) is an order excluding the administrator’s costs of the application from being paid as an expense of the administration. Administrators are therefore strongly incentivised to comply.

The Court is currently considering formalising this requirement in a Practice Note or Practice Direction.

As a consequence, administrators and their solicitors now need to plan the detail of any extension application well in advance of the expiry of the administration, taking into consideration the complexity and size of the case.

Many thanks to Alex Barden of Erskine Chambers for bringing this to our attention.