Re Sports Betting Media Ltd (in admin)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE BRIGGS |
| Judgment Date | 09 July 2007 |
| Neutral Citation | [2007] EWHC 2085 (Ch) |
| Docket Number | Case No: 3859 of 2007 |
| Court | Chancery Division |
| Date | 09 July 2007 |
[2007] EWHC 2085 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand
London WC2A 2LL
Mr Justice Briggs
Case No: 3859 of 2007
Ms R Agnello appeared on behalf of the Applicant
I have been asked to deal by way of directions with two issues which arise in the ongoing administration of Sports Betting Media Limited. It went into administration on 20 July 2006, and Messrs Andrew Andronikou and Peter Kubik were appointed administrators. They were removed, and the present administrators, Mr Wiseman and Mr Underwood, appointed on 12 October 2006. It is material to note that Mr Wiseman and Mr Underwood were appointed on an understanding with an interested third party that their fees and expenses would be met if necessary by that third party, an understanding upon which I am told that the third party reneged by 30 November 2006.
It became apparent early on during the new administrators' period of office that contrary to the representations which had been made when they took over from the previous administrators, there would be insufficient funds coming into their custody or control by the conclusion of the realisation of the company's available assets to pay even those persons who, pursuant to paragraph 99(4) of schedule B1 to the Insolvency Act, would be entitled to a charge in respect of debts or liabilities arising out of contracts entered into by the former administrators.
That charge bites upon the property of which the former administrator had custody or control immediately before the cessation of that former administrator's period of office, that is, in this case, 12 October 2006. It is currently anticipated that although the precise amount will be affected by the method of distribution chosen, something in the region of 75 pence in the pound would be payable to those, I will call them, paragraph 99(4) creditors.
The first issue upon which I am asked to give directions is how the entitlements of those creditors inter se should be calculated in relation to the funds available. The two alternative suggestions which have been made to me by Ms Agnello, who appears on behalf of the new administrators, are either that the amounts unpaid and outstanding to those creditors should be identified and that they should be paid pari passu in the usual way, or the alternative method which she describes under the heading “Hotchpot” is that those creditors should have to bring into account against their claims part payments of amounts owing to them during the period of office of the previous administrators. I was shown schedules which suggest that there is a broad spectrum from non-payment to part payment and payment in full of amounts due to persons who, to the extent that they are unpaid, would be paragraph 99(4) creditors now.
Notification to all the creditors was given by the present administrators that this issue would have to be resolved in court if necessary, and although certain creditors notified to the administrators their intention to appear today, none have in fact appeared and I have heard submissions only, therefore, from Ms Agnello on behalf of the new administrators.
Doing the best I can and in the absence of adversarial argument, it seems to me that the first of the two proposed methods of distribution is the appropriate one. I was referred in particular in relation to the alternative hotchpot method to the decision of the Privy Council in Cleaver v Delta American Reinsurance Company [2001] 2 AC 328. The governing principle as it appears to me to be ascertained from that decision, which was a case about an international insolvency and funds accruing available as part of the insolvent estate both in this jurisdiction and abroad, is that hotchpot operates or may operate in an appropriate case in relation to the assets in the insolvent estate in question. Thus, for example, a secured creditor who seeks to prove in the liquidation does not have to bring into hotchpot what he may have been paid by enforcing his security because the property the subject of his security is not part of the liquidation estate. By contrast, creditors who recover abroad need to bring their...
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