Re Bradwin Ltd
| Jurisdiction | Northern Ireland |
| Judgment Date | 01 January 1997 |
| Date | 01 January 1997 |
| Court | Chancery Division (Northern Ireland) |
- Petition for administration order to achieve survival of company as going concern - Purpose behind petition to enable company's premises to be let out so as to produce income to discharge debts over period of time - No intention to seek voluntary arrangement or statutory compromise - Whether petition should be granted - Insolvency (Northern Ireland) Order, 1989 (S.I. No. 2405), art. 21.
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B. Ltd. was incorporated on 5 June, 1995, with a nominal share capital of £100,000. However, the amount of the capital paid up was £10,102. Its fixed assets were claimed to be worth some £360,000. B. Ltd. had two substantial secured creditors, the bank which was the holder of a first charge on its premises and which was owed £32,000 and Guinness which had a second mortgage over B. Ltd.'s assets. The debt due to the latter creditor amounted to some £270,000. The unsecured creditors amounted to £88,329 of which some £45,000 represented debts due to company directors. The directors had indicated a willingness to postpone the debts due to them until all the other creditors were paid. In B. Ltd.'s financial report furnished by the proposed administrator under the Insolvency (Northern Ireland) Rules it was stated that B. Ltd. was insolvent and that there was no prospect of its bankers or Guinness providing further borrowings. It was further stated that in the event of the liquidation of B. Ltd. it was likely that the liquidator would be forced to sell the assets without the trade attached and that that would result in a less favourable realisation of the assets resulting in a lower level of dividend to creditors, with unsecured creditors being unlikely to receive any dividend. An administration order was considered to be expedient and offered a better prospect for creditors than liquidation. The directors had found a party which would be prepared to enter into a tenancy of its premises at a weekly rent of £1,000 or £52,000 p. a. for a term of nine years. Under the proposed letting B. Ltd. would be responsible for the rates and insurance in respect of the premises and would have to pay the bank and Guinness sums in discharge of interest and possibly towards reduction of the principal debts. The bank and Guinness had respectively agreed to take monthly payments of £500 and £1,000. After discharge of those figures B. Ltd. would be left with a regular periodic sum out of which it intended to make payments to the unsecured creditors. The company...
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