Administration: Out of court appointments

Company directors must ensure that they act in accordance with the company's articles of association when deciding to appoint administrators. The High Court has recently set aside an out-of-court appointment of administrators to a company that was made by a majority of the company's directors who acted without the express authority of a board resolution.

The directors had failed to comply with provisions of the company's articles of association when making the purported appointment, because they failed to hold a quorate board meeting to approve placing the company into administration or act with unanimity. The directors lacked authority to appoint administrators to the company and the resulting appointment was consequently invalid. In another recent case, the High Court confirmed that it could not hear an application for an administration order that was brought by a company without the requisite authorisation under its articles.

This checklist sets out the issues that need to be considered when placing a company into administration using the out-of-court route.

For further information, please contact our Dispute Resolution Team.

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O'Neill Patient Solicitors LLP
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