Can an education special administrator propose a CVA?

The administrators were considering proposing a company voluntary arrangement to the College’s creditors to further the purpose of the special administration and as part of the transfer of the College’s undertaking.

Whilst the Act provided for a FE institution to propose a CVA, the administrators felt that the Act was unclear as to whether education administrators could do so as the definition of administrator in that regard may not include an education administrator.

The ICCJ accepted that the modification wording was unclear, but held that an education administrator fell into the definition of “administrator” as a party who could propose a CVA pursuant to section 1(3) of the Insolvency Act 1986.

This case confirms the principle and provides guidance where the drafting of the legislation was not entirely clear. However the education administrators only asked the court to determine whether they were entitled to propose a CVA, not whether it was appropriate to do so in the circumstances.

Re The Corporation of West Kent and Ashford College [2020] EWHC 907 (Ch)