Wormleighton & Anor v Salamander Invest A/S & Anor

Wormleighton & Anor v Salamander Invest A/S & Anor

The administrators’ proposals did not have real prospects of achieving the statutory purposes of administration (rescue as a going concern or better result than liquidation). The court has jurisdiction to direct that a creditors’ decision procedure to replace administrators should not be implemented, but in this case, since the proposals were not authorised, the issue did not arise. The administration should not continue, and the matter was adjourned for creditors to consider compulsory winding up.

Parties
Applicant (joint Administrator of Fortuna Fix Limited): Ian Colin Wormleighton; Applicant (joint Administrator of Fortuna Fix Limited): David Philip Soden; Respondent (largest Minority Shareholder): Salamander Invest A/S; Respondent (majority Creditor): Genesis Technologies Limited
Jurisdiction
England and Wales
Judgment Date
03 September 2020
Procedural Posture
Insolvency (administration) / Post Rejection of Administrators’ Proposals; Applications for Directions Under Schedule B1, Paragraphs 55, 56, 63, and 97 of the Insolvency Act 1986
Outcome
Administrators’ proposals not authorised; administration not to continue; matter adjourned for possible compulsory winding up.
Legal Topics
Administration Proposals, Replacement of Administrators, Derivative Claims, Creditors’ Rights, Court’s Supervisory Jurisdiction
Insolvency Law Company Law Administration Proposals Replacement of Administrators Derivative Claims Creditors’ Rights Court’s Supervisory Jurisdiction

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Parties

Ian Colin Wormleighton

Applicant (joint Administrator of Fortuna Fix Limited)

David Philip Soden

Applicant (joint Administrator of Fortuna Fix Limited)

Salamander Invest A/S

Respondent (largest Minority Shareholder)

Genesis Technologies Limited

Respondent (majority Creditor)

Procedural Posture

Insolvency (administration) / Post Rejection of Administrators’ Proposals; Applications for Directions Under Schedule B1, Paragraphs 55, 56, 63, and 97 of the Insolvency Act 1986

Legal Issues

  1. 1 Whether the court should authorise implementation of administrators’ proposals after creditor rejection
  2. 2 Whether the court has jurisdiction to direct that a creditors’ decision procedure to replace administrators should not be implemented
  3. 3 Whether the administrators’ proposals have real prospects of achieving the statutory purposes of administration

Ratio Decidendi

The administrators’ proposals did not have real prospects of achieving the statutory purposes of administration (rescue as a going concern or better result than liquidation). The court has jurisdiction to direct that a creditors’ decision procedure to replace administrators should not be implemented, but in this case, since the proposals were not authorised, the issue did not arise. The administration should not continue, and the matter was adjourned for creditors to consider compulsory winding up.

Court Disposition

Administrators’ proposals not authorised; administration not to continue; matter adjourned for possible compulsory winding up.

Orders

  • Administrators’ proposals not authorised under paragraph 55(2) of Schedule B1.
  • No order for implementation of creditors’ decision procedure to replace administrators.