Administration expense meaning

Re Argentex (Conway v Plass and others) [2025] EWHC 3125 (Ch), [2025] EWHC 3125 (Ch) What are the practical implications of this case? On the Expense Question, the decision offers clear direction on when administrators may create liabilities ranking as an expense of the administration while closing out a trading book. The court confirmed that simply taking no action does not generate an expense liability. As for close out, although it required Argentex to take an affirmative step under the contractual terms (an election to close out), that act did not give rise to an expense liability. Turning to the Termination Question, the judgment addresses a significant point of contractual interpretation in the context of foreign exchange contracts, namely the circumstances in which a provider of foreign exchange services may close out a position for ‘its own protection’—a phrase commonly found in such agreements. The Court concluded that, on the correct construction, the relevant contractual provision could not be relied on by Argentex to shield itself from...

Poxon and another v Wejo Ltd (in administration) [2025] EWHC 135 (Ch) What are the practical implications of this case? As noted by His Honour Judge Cawson KC at paragraph 7 of his judgment, the case raises what appears to be an open point: when the court is invited to set the basis of an office-holder’s remuneration by reference to the time properly spent by the office-holder and their staff on matters arising in the administration under IR 2016, SI 2016/1024, r 18.16(2)(b), should it also examine the quantum of the administrator’s fee estimate provided to creditors pursuant to IR 2016, SI 2016/1024, r 18.16(4)(a)? The judgment therefore addresses whether scrutiny of that estimate forms part of the exercise. In this case, the court concluded that the evidence placed before it by the joint administrators was inadequate. It was not sufficient either to permit a finding that the administrators’ pre-administration costs were allowable as an administration expense, or to enable the court to determine the basis on which their...

Re VTB Capital plc (in administration) [2024] EWHC 2612 (Ch) What are the practical implications of this case? While the judgment does not spell it out, the application seems to have proceeded under paragraph 76(2)(a) of Schedule B1 to the Insolvency Act 1986 (IA 1986). VTB was not in special administration, and Schedule B1 to IA 1986 applied, subject only to the modifications introduced by the Credit Institutions (Reorganisation and Winding up) Regulations 2004. There is no statutory cap on the duration of any extension a court can grant under IA 1986, Sch B1, para 76(2)(a); the appropriate period is fact-sensitive. Any period requested should represent a credible, principled estimate of the time required to meet the administration’s purpose—for instance, completing sales of residual assets or recovering sums due by instalments over a defined timeframe. The application should demonstrate creditor engagement and set out why the remaining tasks cannot sensibly be carried out in liquidation, or why completing them within administration would produce a better outcome for creditors. Frequently,...

This Practice Note sets out the principal tax considerations where creditors move to enforce security over the assets of a distressed company or corporate group. Related Practice Notes in this series address tax issues concerning: acquisitions of distressed debt, and debt restructurings (ie waivers, debt/equity swaps or renegotiations) In addition, Tax and distressed debt—checklist of points to consider distils the main tax points to bear in mind when dealing with distressed debt in general. This Practice Note reviews the enforcement routes open to creditors of troubled businesses and the consequences that may follow. For a detailed look at the loan relationships provisions on debt releases, see: Loan relationships—impairment and debt releases Loan relationships—impairment and debt releases: connected companies Types of enforcement As explained in Practice Note: Tax and distressed debt—debt restructurings, lenders will frequently engage in a restructuring of a distressed group’s debt to help the underlying business continue. Enforcing security over a borrower’s assets...

Prior to the coming into force of the Landlord and Tenant Act 1987, Part II (LTA 1987), the court retained a wide-ranging jurisdiction to appoint a receiver to assume control of the management of any property (including a block of flats) whenever it was considered just and convenient to do so. Nonetheless, that power was seldom exercised in practice in relation to blocks of flats, likely owing to the expense and the frequent requirement, in most cases, and, where applicable, to evidence default by the landlord or managing agents regarding the performance of the landlord’s repairing, maintenance or insurance obligations under the lease. Part II of the LTA 1987 offers an alternative remedy by vesting power in (what are now) the First-tier Tribunal (Property Chamber) in England and the leasehold valuation tribunal in Wales to appoint a manager to take over the management of premises comprising flats; yet that jurisdiction likewise arises only where there is some default by the landlord or the managing agents in performing the landlord’s repair,...

Choosing to include a dispute board within a construction contract’s dispute resolution process is merely the starting point. Once the parties have reached agreement on using a board, attention has to turn to practical matters: who ought to sit on it, the procedure for appointing them, and the way in which the board will carry out its role in practice. This Practice Note addresses the selection and appointment of dispute board members, together with guidance on their operation after appointment. Characteristics of good dispute board members The initial issue for the parties is deciding who should serve on the board. In many agreements, a three-person board is standard, though some also permit a sole-member alternative. The FIDIC forms of contract illustrate this position; they set a three-member board as the default arrangement, yet give both parties the option to choose a single-member board instead. A single appointee quite plainly cuts costs alone, whereas a three-member panel brings a diversity of opinion, a broader spread of experience, and can...

INSOLVENCY ACT APPLICATION NOTICE Case No: [ insert case number ]. Court: High Court (Business and Property Courts, Insolvency and Companies List (ChD)) OR Business and Property Courts in [ insert location ] OR County Court at [ insert location ] (Business and Property Work). In the matter of [ insert company’s name ] and the Insolvency Act 1986. Parties: [ Insert Applicant(s) ] v [ Insert Respondent(s) ]. Under IR 2016 r 18.23. Parties and addresses: Applicants [ names/addresses ]; Respondents [ names/addresses ]. Application relates to [ details ]. Judge: [ level ]. Venue: [ court/hearing centre ]. Ref: [ number ]. Orders sought: Fix remuneration at £[ insert sum ] plus VAT; disbursements £[ insert sum ]. Costs to be an expense of the [ liquidation/administration ]. Any further order or relief the court considers appropriate. Grounds: witness statement of [ name ], dated [ date ]. Service/notice: [ names/addresses, if any, or none ]. Address for...

CASE NO: [ insert case number ] [ WITHIN THE HIGH COURT OF JUSTICE, BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES, INSOLVENCY AND COMPANIES LIST (ChD) OR WITHIN THE HIGH COURT OF JUSTICE, BUSINESS AND PROPERTY COURTS IN [ insert location ] INSOLVENCY AND COMPANIES LIST (ChD) OR IN THE COUNTY COURT SITTING AT [ insert location ] BUSINESS AND PROPERTY WORK...

Where a lease is silent, items left at the premises after expiry of the term remain owned by the tenant (or any other third-party owner). The landlord, as a result, becomes an involuntary bailee of those items. This can create difficulties for a landlord aiming to clear the space for re-letting or another purpose, and may involve additional expense. In particular, the landlord: cannot take or dispose of the items, and must act in a manner that is right and reasonable may face liability in conversion, or for wrongful interference with goods, if the items are sold, damaged or discarded These exposures can be managed by using the procedures in the Torts (Interference with Goods) Act 1977 (T(IG)A 1977), either by serving notice or asking the court for permission to sell the items. Serving notice is the route more often used in day-to-day practice in most cases overall...

Can the administrator sublet the property to the purchaser? An administrator may do whatever is necessary or expedient to manage the company’s affairs, business and property (paragraph 59(1) of Schedule B1 to the Insolvency Act 1986 (IA 1986)), which also encompasses the powers set out in IA 1986, Sch 1. In respect of subletting, IA 1986, Sch 1, para 17 confirms that an administrator has the power to grant or accept the surrender of a lease or tenancy of any company property, and to take a lease or tenancy of any property required or convenient for the company’s business. For further detail, see Practice Note: Roles, powers, functions and duties of an administrator, particularly the section ‘The administrator’s powers’...