Paid-up secured creditors and consent in administrations (Re Pindar Scarborough Ltd)

Table of contents

• What are the practical implications of this case?
• What was the background?
• What did the court decide?
• Case details

Article summary

Restructuring & Insolvency analysis: The court’s decision in Re Pindar Scarborough Ltd was prompted in response to the Insolvency Service’s recent report, the First Review of the Insolvency (England and Wales) Rules 2016 (IR 2016), published on 5 April 2022. Part of the First Review came as some surprise to insolvency practitioners, when it was noted that the government’s position was effectively that the status of secured creditors was determined at the start of entry to an administration and then persisted, regardless of whether said creditor was paid up. Here, Insolvency and Companies Court (ICC) Judge Prentis considered that the conclusion of the First Review could not be correct, and that there was no need to consult paid-up secured parties, helpfully preventing potential administrative headaches. Written by Piers Digby, barrister at Radcliffe Chambers.