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Administrators’ appointment by directors invalid

Directors appointing administrators under paragraph 22(2), Schedule B1, Insolvency Act 1986 must give notice of intention to appoint to the company (pursuant to paragraph 26(2), Schedule B1, Insolvency Act 1986 and Rule 2.20(2)(d), Insolvency Rules 1986).

The "record of the decision of the directors" to make the appointment required by Rule 2.22 must be of a valid board resolution in compliance with the requirements of the company's articles at a meeting properly convened with notice.

So found Sir Andrew Morritt (Chancellor) in Minmar (929) Ltd & Teejinder Paul Chohan v Freddy Khalatschi & Martin John [2011] EWHC 1159(Ch), holding the appointment of administrators in that case invalid.

I am grateful to Lawrence Graham for drawing this decision to my attention.

 

 

Date: 19th May, 2011
Author: Chris Laughton

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