Castlebridge Plant Ltd (Administrators), Re Order Under Section 176a(5) of The Insolvency Act 1986 [2015] ScotCS CSOH_165 (09 December 2015)

Castlebridge Plant Ltd (Administrators), Re Order Under Section 176a(5) of The Insolvency Act 1986 [2015] ScotCS CSOH_165 (09 December 2015)

The cost of making a distribution to unsecured creditors would not be disproportionate to the benefits, as the global sum payable (£71,000–£81,000) is substantial and the sums receivable by a significant number of individual creditors are worth having. The estimated costs represent only a fraction of the prescribed part. Therefore, the requirements of s.176A(5) are not satisfied and the application to disapply s.176A(2) is refused.

Citation
[2015] ScotCS CSOH_165
Parties
Noters: Blair Carnegie Nimmo and Gerard Anthony Friar (joint administrators of Castlebridge Plant Limited)
Jurisdiction
Scotland
Judgment Date
09 December 2015
Procedural Posture
Application Under Insolvency Act 1986 S.176 A(5) / Hearing and Decision on Application
Outcome
Application refused
Legal Topics
Administration of Insolvent Companies, Prescribed Part for Unsecured Creditors, Court Discretion Under S.176 A(5), Distribution of Assets
Insolvency Law Administration of Insolvent Companies Prescribed Part for Unsecured Creditors Court Discretion Under S.176 A(5) Distribution of Assets

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Parties

Blair Carnegie Nimmo and Gerard Anthony Friar (joint administrators of Castlebridge Plant Limited)

Noters

Procedural Posture

Application Under Insolvency Act 1986 S.176 A(5) / Hearing and Decision on Application

Legal Issues

  1. 1 Whether the cost of making a distribution to unsecured creditors would be disproportionate to the benefits under s.176A(5) of the Insolvency Act 1986
  2. 2 Whether the court should disapply the requirement to make a prescribed part available to unsecured creditors

Ratio Decidendi

The cost of making a distribution to unsecured creditors would not be disproportionate to the benefits, as the global sum payable (£71,000–£81,000) is substantial and the sums receivable by a significant number of individual creditors are worth having. The estimated costs represent only a fraction of the prescribed part. Therefore, the requirements of s.176A(5) are not satisfied and the application to disapply s.176A(2) is refused.

Court Disposition

Application refused

Orders

  • Section 176A(2) of the Insolvency Act 1986 is not disapplied; the prescribed part must be made available for unsecured creditors.