Application by an administrator to sell property subject to security
| Author | Mark Watson-Gandy |
| Pages | 183-197 |
OBJECTIVE
An administrator
This, however, does not affect the priority given to the holder of the security or the owner.
The order is at the discretion of the court and the court will need to be satisfied that disposal of the property would be likely to promote the purpose of the administration of the company.
The leave of the court is not required where the administrator wishes to deal with property subject to a floating charge;
184 Corporate Insolvency Practice
APPLICATION
The application is made by notice. The application should be made on notice to the holder of the security.
COURT FEES
Where fresh proceedings need to be brought, a court fee of £280 is payable.
the application can be made as part of exisiting proceedings and the application is on notice to other parties, a court fee of £155 is payable.
EVIDENCE
The administrator should file a witness statement in support. This should address:
ƒ that he makes this application as administrator;
ƒ the date of the administration order;
ƒ the purpose of the administration;
ƒ that he seeks the court’s permission to sell the property which is subject to security;
ƒ the background facts upon which the issue arises;
ƒ the nature of the asset;
ƒ the value of the asset;
ƒ the nature of the security;
ƒ the value of the debt secured;
ƒ that disposal of the property would be likely to promote the purpose of the administration of the company and why.
The witness statement should exhibit:
ƒ evidence of the administrator’s appointment;
ƒ any documents relevant to the issue of valuation, title, security and the sum secured;
ƒ any documents relevant to the facts upon which the issue arises.
SERVICE
The administrator should immediately upon the court fixing the date for the hearing of the application serve the application and supporting evidence with the date and place of hearing on the holder of the security.
The usual rule is that, subject to any other express provision, the application must be served at least 14 days before the date fixed for the hearing.
Service may be effected personally
ORDER
On the order being made, the court will send two sealed copies to the administrator.
The administrator needs to send one copy to the holder of the security or the owner under the agreement.
The administrator needs to send within 14 days
186 Corporate Insolvency Practice
KEY STATUTORY PROVISIONS
Paragraphs 70 to 73 and 111 of Schedule B1 to the Insolvency Act 1986
Charged property: floating charge
70(1) The administrator of a company may dispose of or take action relating to property which is subject to a floating charge as if it were not subject to the charge.
(2) Where property is disposed of in reliance on sub-paragraph (1) the holder of the floating charge shall have the same priority in respect of acquired property as he had in respect of the property disposed of.
(3) In sub-paragraph (2)...
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