After the administrators’ proposals were challenged by creditors, they applied to the court for “directions” seeking to remain in office pending a Supreme Court decision, despite objections from a majority of creditors. The court refused and made a winding up order.
A creditor obtained summary judgment against the company. The company appealed and obtained a stay of enforcement. The Court of Appeal dismissed the appeal and lifted the stay. In response, the company appointed administrators.
A majority of creditors challenged the administrators’ proposals. The administrators applied to court for “directions” that the administrators remain in office. The majority creditors objected.
The Deputy ICCJ was clear that this was not a directions application, rather an adversarial application relating to whether the administrators should stay in office.
The administrators asked the court to “hold the ring” whilst the Supreme Court decided the company’s appeal, but the Deputy ICCJ found, on the facts, that the outcome of the Supreme Court appeal would not affect the insolvency of the company.
After the hearing, but before judgment was handed down, the Supreme Court upheld the company’s appeal.
The Deputy ICCJ also found that, although the outcome of the Supreme Court appeal was irrelevant to whether the administrators should remain in office, the purported purpose of the administration, a better return to a director as a preferential creditor, had no reasonable prospect of being achieved.
The Deputy ICCJ also found that the administrators had incorrectly only allowed the majority creditors to vote for a £1 in respect of their claims, whilst allowing connected creditors to vote in full.
The Deputy ICCJ therefore made a winding-up order placing the company into liquidation, bringing the administration to a conclusion.
Re Kession Capital Limited [2026] EWHC 785 (Ch)
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