Court takes a cautious approach to making a retrospective administration order

LCF went into administration. Consequently the Company went into administration in March 2019 on an appointment made by the Board. Three of the Company’s administrators were also administrators of LCF.

The Company’s administrators applied under Section 236 Insolvency Act 1986 for one of the directors to provide information about the loans. The director opposed the application and applied for a declaration (in October 2019) that the directors’ appointment of administrators had been invalid. The administrators of LCF, as the QFCH, cross applied for a new but retrospective administration order.

The QFCH application was heard first on the basis that it was necessary to put the insolvency regime on an unchallengeable footing, it being common ground that the Company was insolvent. The court ended the March 2019 order and made a new order, but did not decide whether it should be retrospective due to the possible impact on the rights of creditors and third parties which it had not had the opportunity to consider. This was not a case where there were undisputed facts or where there had been some relatively minor administrative error that needed remedying by a retrospective order. However, the court preserved the ability of the QFCH or any other party with a legitimate interest to apply for a retrospective order if one was needed eg by the office holders in respect of their fees and expenses incurred between March and October 2019.

London Capital and Finance Plc (in administration) v London Oil & Gas Ltd (in administration [2020] EWHC 35 (Ch)