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Change of Procedure to Appointing Administrators

From 30 April 2019, administration appointments in the Business and Property Courts (BPCs) have to be made online. This has been the case in London since April 2017 but will apply in the regional BPCs (Leeds, Manchester, Birmingham, Newcastle, Liverpool, Bristol and Cardiff) from this April. From that date, Notices of Intention to Appoint (NOI) and Notices of Appointment (NOA) in the BPCs can no longer be filed in person. Instead, they must be uploaded and submitted to court electronically.

This sounds efficient, but in practice, it may cause practical problems. Why? Because the sealed NOI/NOA will not be available immediately.

Whilst it is currently possible to wait at the court desk for the NOI/ NOA to be endorsed, under the new e-filing system, we will have to wait until the court has processed the filing and uploaded the sealed NOI/NOA to the system. Although we understand that the courts will aim to upload the sealed NOI/NOA as soon as possible (hopefully, within a couple of hours of submission), there will inevitably be a period where the moratorium or appointment has come into effect, but the sealed NOI/NOA supporting that is not available.

The date and time of endorsement on the NOI/NOA will be the date and time that the documents are electronically filed, not the time when they are processed and uploaded.

Why Does This Matter to You?

This matters because:

  1. An aggressive creditor or landlord may not accept that a moratorium is in place until they see a sealed NOI and continue with enforcement action (albeit, without consent of the court) 

  2. Without a sealed copy of the NOA:

    1. A purchaser is unlikely to complete a sale

    2. If a trading administration is envisaged, then any delay in returning a sealed NOA may have a knock on effect in terms of getting on site, making redundancies (if any), arranging insurance, organising staff and managing trading

    3. A pre-pack administration sale may be impacted in terms of the release of the sale contract, cross undertakings and movement of funds

These timing issues could be critical to the administration process and should be factored in to the timeline/process.

Out of Hours Appointments for Director and Company Appointments

Electronic filing is available 24/7 any day of the week, but cannot be used to make an out of hours appointment by a qualifying floating charge holder. The procedure set out in the Insolvency Rules 2016 (Rules) must be followed.

Managing Timing

Issues In order to address the issues that electronic filing may create, we are recommending to clients that NOIs/NOAs be filed as close to 10 a.m. as possible on a business day to give the court sufficient time to process and upload the endorsed NOI/NOA.

If an NOI/NOA is filed later in the working day, there is a chance that the sealed version may not be available until the following day; even though the moratorium/appointment will be effective from the date and time of submission.

Electronic filing is compulsory in the BPCs from 30 April 2019 and this cannot be circumvented even if the matter is extremely urgent.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Devinder Singh, Squire Patton Boggs, Contentious Insolvency Lawyer, UK Attorney
Partner

Devinder leads the Restructuring & Insolvency Group based in our Birmingham office. Devinder's clients include the major clearing banks, asset based lenders, insolvency practitioners, corporates and creditors.

He advises on all aspects of corporate restructuring and insolvency, with a particular specialism in contentious work.

Squire Patton Boggs Restructuring and Insolvency Team is ranked in Tier 1 in the 2014 editions of Chambers UK and Legal 500 where Devinder is described as “commercial” and “a team...

44 121 222 3382
John Alderton, Squire PB, Insolvency and Restructuring, Business Lawyer
Partner

John Alderton is the managing partner of our Leeds office. His particular expertise covers restructuring, reorganisation and business support, lender security reviews and enhancement, as well as contentious and non-contentious insolvency and cross-border issues.

John advises banks and other financiers, insolvency practitioners and other insolvency professionals, directors and management teams, as well as creditors, on all issues arising in stressed and distressed scenarios both within the UK and cross-border.

Chambers UK describes John as “practical and pragmatic”.  Commentators say he “focuses on the end result”. The Legal 500 UK says John is “Amongst the most commercial insolvency lawyers in Leeds”.

John is listed in the 2013 edition of Chambers UK as a leading individual for restructuring and insolvency.

John is a fellow of the Association of Business Recovery Professionals.

44 113 284 7026
Susan Kelly, Squire Patton Boggs, Restructuring Lawyer, Insolvency Attorney
Partner

Susan leads the Restructuring & Insolvency practice group in the UK and Europe and is based in our Manchester office.

She worked in London for the first half of her career and although now based in Manchester she spends time in London, Europe and further afield in her capacity as co-chair of the Cross Border Restructuring group.

Susan's expertise covers a broad range of domestic and international insolvency (both contentious and non-contentious), lender security reviews and enhancement, restructuring, turnaround and...

44 161 830 5006