Can shareholders seek the appointment of an interim administrator? (Zinc Hotels (Investment) Ltd v Beveridge and others)

Can shareholders seek the appointment of an interim administrator? (Zinc Hotels (Investment) Ltd v Beveridge and others)

This case is the latest in an interesting run of authorities during 2018 concerning administrations, including Davey v Money and another, and Re Ve Interactive Ltd (in administration). This case is a welcome decision that brings greater clarity to the rights of contributories and others to involve themselves in administrations and the standard to be applied to an administrator’s decision-making. Written by Joseph Curl, barrister, of 9 Stone Buildings.

Zinc Hotels (Investment) Ltd v Beveridge and others [2018] EWHC 1936 (Ch), [2018] All ER (D) 172 (Jul)

Zinc Hotels (Investment) Ltd v Beveridge and others [2018] EWHC 2118 (Ch) (consequential matters)

What are the practical implications of this case?

The practical implications of this case may be summarised as follows:

  • the court does not have power to appoint a provisional administrator before a company has been placed into administration
  • once a company has been placed in administration, the court has power to appoint an additional administrator under paragraph 103 of Schedule B1 to the Insolvency Act 1986 (IA 1986)
  • the court has power to grant an interim order to appoint an additional administrator under IA 1986, Sch B1, para 74(3)(d)
  • the scheme of IA 1986, Sch B1 is that where there is a qualifying floating charge holder, they get to decide who the administrator should be
  • the court does not have power to appoint an additional administrator (whether on an interim or final basis) unless the conditions of IA 1986, Sch B1, para 103 are complied with
  • where an initial appointment has been made under IA 1986, Sch B1, para 14 by a qualifying floating charge holder, the appointment of any additional administrator may only be made either by:
    • the floating charge holder, or
    • the court on the application of the existing administrators
  • a shareholder does not have standing to apply for the appointment of an additional administrator where administrators have been appointed under IA 1986, Sch B1, para 14

Moreover, the case provides a useful summary of most of the

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About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.