Relieved administrators granted relief (Re Patisserie Holdings plc)

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: This decision is the latest to consider what happens when administrators apply their commercial judgement, rather than what the insolvency legislation prescribes. After a thorough review of the authorities and legislation, the court essentially held that: (i) administrators who seek approval of their proposals from an informal committee of creditors holding over 50% of the debt will nevertheless be validly appointed; and (ii) a failure to comply with some of the shorter deadlines surrounding the requisitioning of, and calculation of votes at, creditors’ meetings will likely be remediable defects. As a counterbalance to the reminder to office-holders that they should check what the legislation requires, the decision also stands as a reminder that a pragmatic approach should be taken in relation to applications that, in effect, seek retrospective validation of a state of affairs that no longer exist. Written by Samuel Parsons, barrister at Guildhall Chambers.