Jurisdiction(s):
United Kingdom

Re Moss Groundworks Ltd: High Court insists on valuation, marketing and SIP 16 compliance before approving management pre-pack administration; initial application adjourned and costs disallowed (England and Wales)

Published on: 19 November 2019

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Re Moss Groundworks Ltd [2019] EWHC 3079 (Ch) (10 September 2019), [2019] All ER (D) 91 (Sep)

What are the practical implications of this case?

The court will not entertain an administration application designed to enable a pre-pack sale to existing management where the evidential foundation is so weak that it triggers reasonable doubts about the propriety of the pre-pack. It will be an uncommon instance in which the court proceeds where, as occurred here at an initial hearing before Snowden J, the supporting material falls markedly short. In particular, the court was not satisfied because:

there was a pronounced disparity between the apparent value of book debts and work in progress and the consideration being offered for those assets;
the marketing of the business appeared to have been extremely truncated;
and, on its face, the marketing was not only abbreviated but also seemingly not compliant with Statement of Insolvency Practice 16.

Accordingly, the court would not proceed in the face of such deficiencies.

What was the background?

The company had applied...

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