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Can administrators consent to the distribution of surplus funds to shareholders? (Re Lehman Brothers International (Europe) (in administration))

Can administrators consent to the distribution of surplus funds to shareholders? (Re Lehman Brothers International (Europe) (in administration))
Published on: 30 July 2020
Published by: LexisPSL
  • Can administrators consent to the distribution of surplus funds to shareholders? (Re Lehman Brothers International (Europe) (in administration))
  • What are the practical implications of this case?
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Restructuring & Insolvency analysis: This was an application by the administrators of Lehman Brothers International (Europe) Ltd (LBIE) for a direction under paragraph 63 of Schedule B1 to the Insolvency Act 1986 (IA 1986) that they be at liberty to consent to a request from LBIE’s directors to distribute surplus funds to LBIE’s sole shareholder. While the overall objective of the administrators’ actions had to be to rescue the company as a going concern, they did not have to show a clearly defined causal relationship between every action they took and that objective. It was held that the proposed distribution was commercially sensible and it was appropriate to make the direction sought. Written by Nora Wannagat, barrister, at 9 Stone Buildings. or take a trial to read the full analysis.

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