Nimmo & Anor, Joint Administrators of Station Properties (In Administration) [2013] ScotCS CSOH_120 (12 July 2013)

Nimmo & Anor, Joint Administrators of Station Properties (In Administration) [2013] ScotCS CSOH_120 (12 July 2013)

Administrators must make a prudent, informed assessment of the company's ability to pay its debts as they fall due, considering all material creditor claims, before ending administration. A substantial change in objective requires revision of proposals and creditor approval.

Citation
[2013] ScotCS CSOH_120
Parties
Petitioner: Blair C Nimmo and Gary S Fraser, Joint Administrators of Station Properties Ltd (in administration); Respondent: Station Properties Ltd; Interested Party: Dunedin Building Co Ltd
Jurisdiction
Scotland
Judgment Date
12 July 2013
Procedural Posture
Petition for Directions in Administration / Judgment on Application for Directions
Outcome
Directions granted in part; administrators must revise proposals and seek creditor approval if changing objective.
Legal Topics
Administration Termination, Administrator's Duties, Creditors' Rights, Revision of Proposals, Going Concern Assessment
Insolvency Company Law Administration Termination Administrator's Duties Creditors' Rights Revision of Proposals Going Concern Assessment

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Parties

Blair C Nimmo and Gary S Fraser, Joint Administrators of Station Properties Ltd (in administration)

Petitioner

Station Properties Ltd

Respondent

Dunedin Building Co Ltd

Interested Party

Procedural Posture

Petition for Directions in Administration / Judgment on Application for Directions

Legal Issues

  1. 1 Whether administrators can end administration under para 80 of Schedule B1 if company can pay debts as they fall due
  2. 2 Whether administrators must apply to court under para 79 before ending administration
  3. 3 Whether administrators must revise proposals under para 54 if changing administration objective

Ratio Decidendi

Administrators must make a prudent, informed assessment of the company's ability to pay its debts as they fall due, considering all material creditor claims, before ending administration. A substantial change in objective requires revision of proposals and creditor approval.

Court Disposition

Directions granted in part; administrators must revise proposals and seek creditor approval if changing objective.

Orders

  • Administrators must not end administration without revising proposals and obtaining creditor approval if changing objective from distribution to rescue as going concern.
  • Administrators must make a prudent, informed assessment of DB's claim before deciding if company is a going concern.