Defects in the process of appointing an administrator

Was there a defect in an administrator's appointment if Financial Conduct Authority (FCA) agreement was not filed at same time as the notice of intention to appoint? The case of Re Harlequin Management Services Ltd (oral judgment handed down) adds to the long list of cases which discuss the issue of the validity of the appointment of an administrator in the face of a potential defect in process. Eleanor Stephens in our Restructuring & Insolvency team looked at the issues.

What were the key facts of the case?

Harlequin was a London based company which acted as agents for international property investors. It was therefore regulated by the FCA.

In April 2013 the directors took advice and instructed solicitors to place the company into administration.

Section 362A of the Financial Services and Markets Act 2000 (FSMA 2000) states that an administrator of the company may not be appointed without the consent of the appropriate regulator, that consent must be in writing and must be filed in court along with the notice of intention to appoint (emphasis added) or notice of appointment, as appropriate.

Prior to filing the notice of intention, solicitors for the directors phoned the FCA to enquire whether consent was required. They were told by phone that consent was not required, and so they proceeded to file the notice of intention with the court that day.

However,