JAMES STEPHEN AND ANOTHER AS JOINT LIQUIDATORS OF RFC 2012 PLC FOR ORDERS UNDER PARAGRAPH 75 OF SCHEDULE B1 TO THE INSOLVENCY ACT 1986 [2021] ScotCS CSOH_99 (06 October 2021)

JAMES STEPHEN AND ANOTHER AS JOINT LIQUIDATORS OF RFC 2012 PLC FOR ORDERS UNDER PARAGRAPH 75 OF SCHEDULE B1 TO THE INSOLVENCY ACT 1986 [2021] ScotCS CSOH_99 (06 October 2021)

The court found that the respondents, as joint administrators, exercised their professional judgment in managing the administration of RFC 2012 plc, including decisions on redundancies, wage reductions, player sales, and the sale process. The court held that while alternative strategies were available, the respondents' actions did not fall below the standard of care expected of competent insolvency practitioners in the circumstances. The noters failed to establish that the respondents breached their duties or that any alleged failures caused the company loss on a balance of probabilities or on a loss of a chance basis.

Citation
[2021] ScotCS CSOH_99
Parties
Noters: James Bernard Stephen and Malcolm Cohen as Joint Liquidators of RFC 2012 plc; Respondents: David John Whitehouse and Paul John Clark
Jurisdiction
Scotland
Judgment Date
06 October 2021
Procedural Posture
Application Under Paragraph 75 of Schedule B1 to the Insolvency Act 1986 / Proof Before Answer; Judgment
Outcome
Application refused; no order for contribution against the respondents.
Legal Topics
Administrator's Duties, Breach of Duty, Loss of a Chance, Sale of Business Assets, Valuation of Assets, Redundancy Management
Insolvency Law Company Law Administrator's Duties Breach of Duty Loss of a Chance Sale of Business Assets Valuation of Assets Redundancy Management

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Parties

James Bernard Stephen and Malcolm Cohen as Joint Liquidators of RFC 2012 plc

Noters

David John Whitehouse and Paul John Clark

Respondents

Procedural Posture

Application Under Paragraph 75 of Schedule B1 to the Insolvency Act 1986 / Proof Before Answer; Judgment

Legal Issues

  1. 1 Whether the joint administrators breached their duties to the company during administration by failing to manage costs and failing to obtain the best possible sale price for the business and assets.

Ratio Decidendi

The court found that the respondents, as joint administrators, exercised their professional judgment in managing the administration of RFC 2012 plc, including decisions on redundancies, wage reductions, player sales, and the sale process. The court held that while alternative strategies were available, the respondents' actions did not fall below the standard of care expected of competent insolvency practitioners in the circumstances. The noters failed to establish that the respondents breached their duties or that any alleged failures caused the company loss on a balance of probabilities or on a loss of a chance basis.

Court Disposition

Application refused; no order for contribution against the respondents.