Application by an administrator to end the administration

AuthorMark Watson-Gandy
Pages211-225
Chapter 14


Application by an Administrator to End the Administration

OBJECTIVE

An administrator may apply to the court for an order that his appointment is to cease to have effect from a specified time.1

The administrator is obliged to make this application if:

ƒ he has come to the view that the purpose of the administration cannot be achieved;2

ƒ he thinks that the company should never have entered administration;3

ƒ a creditors’ meeting requires him to make this application;4

ƒ he was appointed by an order of the court and he thinks that the purposes of the administration have been sufficiently achieved.5

APPLICATION

The application is made by application to the judge. A copy of the application should be filed at court with one additional copy for each party to be served.6

Where the administrator also seeks a winding up order, the application should be in the form of a petition.

1Paragraph 79(1) of Schedule B1 to the Insolvency Act 1986. An administrator is not confined to the mandatory grounds for making an application under this head: Re TM Kingdom Ltd (in administration) [2007] EWHC 3272 (Ch), [2007] BCC 480.

2Paragraph 79(2)(a) of Schedule B1 to the Insolvency Act 1986.

3Paragraph 79(2)(b) of Schedule B1 to the Insolvency Act 1986.

4Paragraph 79(2)(c) of Schedule B1 to the Insolvency Act 1986.

5Paragraph 79(3) of Schedule B1 to the Insolvency Act 1986. If the administrator was appointed out of court he may choose to either end his appointment by a court application or rely on the alternative procedure under paragraph 80 of Schedule B1 to the Insolvency Act 1986.

6Rule 12.7 of the Insolvency (England and Wales) Rules 2016.

212 Corporate Insolvency Practice

PROGRESS REPORT

The application notice should have a progress report attached to it, setting out the progress in the administration since the last progress report (if any) or from the date of the company entered administration, and a statement indicating what the administrator thinks should be the next steps for the company.7

COURT FEES

Where fresh proceedings need to be brought, a court fee of £280 is payable.8If 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.9Where the application is made by consent or without notice in existing proceedings, a court fee of £50 is payable.10

EVIDENCE

The administrator should file a witness statement in support. This should address:

ƒ that he makes this application as administrator;
ƒ the objects of the administration;
ƒ the reason he seeks the end of his appointment as an administrator; ƒ what he thinks the next steps should be for the company;11

ƒ if the application is made at the request of the creditors’ meeting, he should indicate whether or not he agrees with the requirement by the creditors (and why);12

ƒ if the application is not made at the request of the creditors’ meeting, he should confirm that he has given at least 5 business days’ notice of his application to the creditors and to the person who made the administration application or appointed him;13

ƒ if there is an application to wind up, that he has given the creditors notice whether he intends to seek appointment as liquidator.14

The witness statement should exhibit:

ƒ evidence of the administrator’s appointment;
ƒ the progress report (if not separately provided);

7Rule 3.57(1)(a) of the Insolvency (England and Wales) Rules 2016.

8Paragraph 3.5 of Schedule 1 to the Civil Proceedings Fees Order 2008.

9Paragraph 3.12 of Schedule 1 to the Civil Proceedings Fees Order 2008.

10Paragraph 3.11 of Schedule 1 to the Civil Proceedings Fees Order 2008.

11Rule 3.57(1)(b) of the Insolvency (England and Wales) Rules 2016.

12Rule 3.57(1)(c) of the Insolvency (England and Wales) Rules 2016.

13Rule 3.57(2)(a) of the Insolvency (England and Wales) Rules 2016.

14Rule 3.57(3) of the Insolvency (England and Wales) Rules 2016.

ƒ if the application is not made at the request of the creditors’ meeting, a copy of the notice of his application to the creditors;15

ƒ if the application is not made at the request of the creditors’ meeting, a copy of any responses from the creditors to the notice of his application to the creditors.16

NOTICE TO THE CREDITORS

The application should be made on at least 5 business days’ notice to the person who applied for his appointment and the creditors.

If the administrator combines his application with an application for an order to wind up the company,17he must notify the creditors whether he intends to seek appointment as liquidator.18

NOTICE TO THE COURT

If the court makes an order to end the administration, the administrator shall send the Registrar of Companies notice of the court’s order in Form 2.33B.

SERVICE

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.19However, the court does have power, in cases of urgency, to hear an application immediately with or without notice to the other parties.20

Service may be effected personally21or by post in accordance with the rules on postal service under Part 6 of the CPR.22Service on a person may be effected by service on that person’s solicitor, if they are authorised to accept service on that person’s behalf.23

15Rule 3.57(2)(b) of the Insolvency (England and Wales) Rules 2016.

16Rule 3.57(2)(b) of the Insolvency (England and Wales) Rules 2016.

17Section 124 of the Insolvency Act 1986. Whilst no express mention is made of an administrator under section 124 having the power to apply to wind up the company, this does not prevent the application being made because the petition of the administrator is expressed as the petition of the company by its administrator: rule 7.27 of the Insolvency (England and Wales) Rules 2016.

18Rule 3.57(3) of the Insolvency (England and Wales) Rules 2016.

19Rule 12.9(3) of the Insolvency (England and Wales) Rules 2016.

20Rule 12.10(1) of the Insolvency (England and Wales) Rules 2016.

21Rule 1.44 of the Insolvency (England and Wales) Rules...

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