Retrospective application of administration orders—Mond v Synergi Partners

Retrospective application of administration orders—Mond v Synergi Partners

Can an administration order take retrospective effect when there has been a defective appointment of liquidators? Adam Deacock, barrister, and John Jessup, pupil, at 11 Stone Buildings, examine the court’s decision in Mond v Synergi Partners.

Original news

Mond v Synergi Partners Ltd [2015] EWHC 964 (Ch), [2015] All ER (D) 81 (Apr)

The applicant, in his capacity as a creditor of the company for the purposes of para 12(1(c) of Sch B1 to the Insolvency Act 1986 (IA 1986), sought an administration order to take effect retrospectively from November 2010. The court was being asked to make a retrospective order which would cure the fact of the void appointments of the purported present liquidators, by casting back over four years and validating the actions of those individuals, not as liquidators, but as administrators, in the intervening period, with a view to the company being moved by those freshly appointed administrators into creditors’ voluntary liquidation (CVL). The Chancery Division held that, in the circumstances, the only appropriate outcome for the present administration application was to make an order for the compulsory winding-up of the company.

Briefly, what was the background to the application?

On 4 February 2015 the applicant applied for an administration order in his capacity as a creditor under IA 1986, Sch B1, para 12(1)(c). The order was to take effect from 23 November 2010 (ie it was intended to be retroactive so as to create an administration fur and a half years earlier).

The applicant had appointed an administrator to the company on 22 November 2009. The administrator purported to move the company into CVL, and to appoint joint liquidators to carry this out, by a notice completed on 23 November 2010 and registered on 27 November 2010. However, the administration period had not been extended and had expired on 22 November 2010. The joint liquidators had therefore never been validly appointed, but nonetheless

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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.