Jurisdiction(s):
United Kingdom

High Court grants five-year extension to VTB Capital administration: IA 1986 Sch B1 criteria, scheme of arrangement and sanctions; guidance from Lehman and Nortel (England and Wales)

Published on: 18 December 2024

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

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, the rationale is to sidestep the extra expense, delay, and risk associated with liquidation. Here, the circumstances...

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