BXL Services Decision: Clarity On Appointing Administrators

Readers will be aware of the conflicting authorities on the effect of directors omitting to give notice of their intention to appoint administrators to the company or any of the other persons listed at rule 2.20 of the Insolvency Rules 1986.

In Hill v Stokes (2010) and Virtual Purple Professional Services Ltd (2011), it was held that an appointment of administrators was not rendered invalid when directors failed to give notice of their intention to appoint to the company or to landlords who were distraining. However, in Minmar (2011) and Msaada Group (2011), the courts decided that failure to give notice to the company or the supervisor of a voluntary arrangement meant that the subsequent appointment of administrators was invalid.