Administration order granted

Marko Ventures Ltd (MVL) applied to appoint administrators for London Antiaging Clinic Ltd (the Company). MVL made the application pursuant to para.12(1)(c) of Schedule B1 to the Insolvency Act 1986. MVL was the majority shareholder and principal funder of the Company. The application was opposed by the Company’s minority shareholders.

The minority shareholders objected to the application, suggesting that the shareholders' agreement contained an implied term that shareholders could not place the company into administration based on debts owed to them. This, it was argued, was necessary to give business efficacy to the agreement  Further, whilst is was accepted that MVL was a creditor, there was a dispute about whether repayment was due.

The court found that MVL had standing to make the application, due to the unpaid loans notes, rejecting the argument about the implied term in the shareholders' agreement and found that the administration order was appropriate given the company's insolvency and the benefits to creditors.

In circumstances where the Company was clearly insolvent, the administration would achieve a better outcome for creditors than liquidation, albeit this would be achieved through a pre-pack sale to a company connected to MVL. The court granted the administration order, with MVL's costs payable as an expense in the administration.
This case confirms that the court will scrutinise administration applications, particularly involving pre-packaged sales to connected parties and where there are concerns raised about the use of administration. The court will exercise its discretion to secure the best outcome for creditors.

Marko Ventures Ltd v London Antiaging Clinic Ltd [2025] EWHC 340 (Ch).

Our content explained