Challenging administrator appointments–improper purpose and Braganza duty (Glint Pay Ltd & others v Baker and Rowley)
Restructuring & Insolvency analysis: The High Court considered the validity of administrators’ appointments, made ‘out-of-court’ by a secured creditor under paragraph 14 of Schedule B1 to the Insolvency Act 1986 (IA 1986), where: (i) the appointments were made under security which the appointing creditor had acquired (together with the underlying debt) with the specific intention of calling an event of default and then acquiring the borrowers’ business and assets out of administration, and (ii) the companies were not actually insolvent, the event of default relied upon to render the security enforceable was the companies’ failure to provide information. The administrators sought reverse summary judgment and succeeded, the court finding that the appointing creditor was not subject to a Braganza duty and nor was its purpose in making the appointments improper.Written by Sam Fenwick, Partner, and Isabelle Burnett, Solicitor Apprentice, at Wedlake Bell LLP.