Arlington Infrastructure Ltd & Anor v Woolrych & Ors

Arlington Infrastructure Ltd & Anor v Woolrych & Ors

The Junior Creditors' QFCs over the Subsidiaries were not enforceable at the time of appointment because the Deed of Priority required prior written consent from the Senior Creditors for any enforcement step, including appointing administrators, and no such consent was obtained. This was a fundamental defect, not a procedural irregularity. The purported appointments of administrators were therefore invalid and a nullity.

Parties
Applicant: Arlington Infrastructure Limited (in administration); Applicant: Mark Agrasut; Respondent: Ben Woolrych; Respondent: Paul Allen; Respondent: Jason Baker; Respondent: Strategic Advantage SPC Arlington 1 SP; Respondent: Strategic Advantage SPC Arlington 3 SP; Respondent: ARL O09 Limited (purportedly in administration); Respondent: ARL 011 Limited (purportedly in administration); Respondent: BRK 001 Limited (purportedly in administration); Respondent: Strategic Advantage SPC
Jurisdiction
England and Wales
Judgment Date
19 November 2020
Procedural Posture
Insolvency Application / Judgment on Validity of Administrators' Appointment Under Paragraph 16 of Schedule B1
Outcome
Purported appointments of administrators by the Junior Creditors over the Subsidiaries declared invalid and a nullity.
Legal Topics
Appointment of Administrators, Enforceability of Floating Charges, Deeds of Priority, Out of Court Insolvency Procedures
Insolvency Company Law Contract Appointment of Administrators Enforceability of Floating Charges Deeds of Priority Out of Court Insolvency Procedures

Case Brief

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Parties

Arlington Infrastructure Limited (in administration)

Applicant

Mark Agrasut

Applicant

Ben Woolrych

Respondent

Paul Allen

Respondent

Jason Baker

Respondent

Strategic Advantage SPC Arlington 1 SP

Respondent

Strategic Advantage SPC Arlington 3 SP

Respondent

ARL O09 Limited (purportedly in administration)

Respondent

ARL 011 Limited (purportedly in administration)

Respondent

BRK 001 Limited (purportedly in administration)

Respondent

Strategic Advantage SPC

Respondent

Procedural Posture

Insolvency Application / Judgment on Validity of Administrators' Appointment Under Paragraph 16 of Schedule B1

Legal Issues

  1. 1 Whether the Junior Creditors' qualifying floating charges (QFCs) over the Subsidiaries were enforceable at the time of appointing administrators under paragraph 16 of Schedule B1 of the Insolvency Act 1986
  2. 2 Whether failure to obtain Senior Creditors' written consent under the Deed of Priority rendered the appointments invalid or a mere irregularity

Ratio Decidendi

The Junior Creditors' QFCs over the Subsidiaries were not enforceable at the time of appointment because the Deed of Priority required prior written consent from the Senior Creditors for any enforcement step, including appointing administrators, and no such consent was obtained. This was a fundamental defect, not a procedural irregularity. The purported appointments of administrators were therefore invalid and a nullity.

Court Disposition

Purported appointments of administrators by the Junior Creditors over the Subsidiaries declared invalid and a nullity.

Orders

  • Declaration that the appointments of administrators over the Subsidiaries by the Junior Creditors are invalid.