Restructuring Within The Energy Sector: What Can Be Learnt From The Bulb Energy Special Administration?

Why is this case interesting?

For the first time, the high court¹ has exercised its discretion to make an order under the Energy Act 2004 and Energy Act 2011 appointing special administrators in respect of an energy supply company rather than using the more familiar process of appointing an alternative supplier.

The court also concluded, and provided a formal direction, that the special administrators had the power, and it was proper for them, to enter into a £1.69 billion funding agreement that provided for repayments outside the usual statutory order of priorities and allowed certain unsecured creditors to be paid in full.

The legal and regulatory framework

Ofgem has two tools to deal with failing energy suppliers – the Supplier of Last Resort regime (SoLR) and an Energy Supply Company Special Administration (Special Administration).