Jurisdiction(s):
United Kingdom

Administration challenge over refinance, sale and profit-share dismissed; removal threshold reaffirmed and independence upheld (Nardelli v Richardson) (England and Wales)

Published on: 19 December 2024

Published by a LexisNexis Restructuring & Insolvency expert

Legal News

Article summary

Nardelli and others v Richardson and another [2024] EWHC 2740 (Ch)

What are the practical implications of this case?

From the standpoint of office-holders and their advisers, the ruling provides reassurance, confirming the consistently demanding bar for applications to remove them. It will reassure office-holders and advisers because it underlines how exacting that test remains in practice.

Set against that is the theme in the judgment that the administrators had generally:

identified the paragraph 3, Schedule B1 Insolvency Act 1986 objectives and kept them under continual review;
assessed the material before them;
sought out and followed suitable external advice;
and, critically, while noting creditors’ and shareholders’ views, preserved their independence at all times.

Those features were central to the assessment of their conduct.

Seen this way, the decision serves as a practical illustration of a proper response when a creditor already in a powerful position attempts to consolidate that advantage throughout the administration. From start to finish in that process.

For the applicants, it underlines that irritation at seeming to be ‘short-changed’ in an administration is insufficient on its own; any allegation of ‘unfairness’ must be judged by reference to the statutory waterfall...

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