Q&As

Can an administrator reject a retention of title (ROT), and if so, what options are open to the creditor claiming the ROT to challenge that rejection?

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Published on LexisPSL on 04/06/2018

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • Can an administrator reject a retention of title (ROT), and if so, what options are open to the creditor claiming the ROT to challenge that rejection?
  • Powers of an administrator
  • The moratorium in administration
  • Retention of title

Can an administrator reject a retention of title (ROT), and if so, what options are open to the creditor claiming the ROT to challenge that rejection?

Powers of an administrator

The administrator's powers are the same no matter how they are appointed. They are very wide as an administrator may do anything necessary or expedient for the management of the affairs, business and property of the company. Therefore, while there are specific powers set out under the Insolvency Act 1986 (IA 1986), these are not exhaustive in light of the administrator's overall duty.

As well as the powers granted under IA 1986, Sch B1, an administrator can exercise all powers set out in IA 1986, Sch 1 which are given to administrative receivers to enable them to achieve the purpose of the administration. These are very wide and include doing anything necessary to carry on the business of the company and to realise company property, which can include applying to the court for direction on the performance of their duties. This is limited in practice, as administrators are expected to make their own decisions in the usual course of administration.

The moratorium in administration

When a company enters administration, a moratorium is effected. This provides for a prohibition on any proceedings, actions and steps being taken against the company/its property during the applicable period, except with the consent of

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