Wound-up company put into administration

A company within a group, that was involved in renewable infrastructure projects, was wound up on the petition of HMRC, albeit the petition debt was subsequently repaid. The company had hoped to obtain an adjournment of the petition to enable it to go into voluntary liquidation, but that had not been possible.

In advance of the winding-up order, the company had taken steps to novate a number of contracts that it was no longer able to perform. Those novations were void, having been entered into between presentation of petition and making of the winding-up order.

One of the company’s secured lenders, HSBC, was supportive of the wider group restructuring, having provided facilities across the group.

HSBC therefore applied for an administration order in respect of the company, and for an order validating the novations and payments out. The Official Receiver, as liquidator, remained neutral on the application.

The judge found that HSBC’s floating charge was both “qualifying” and enforceable under the insolvency legislation. While the petition debt had been repaid, the judge found that the company remained insolvent.

The next question was whether the purpose of the administration could be achieved and the judge agreed, on the evidence, that there was a real prospect that administration would achieve a better result for creditors than a compulsory liquidation and therefore made an administration order.

The judge held that, notwithstanding that an administration order had been made, the provisions of section 127 of the Insolvency Act 1986 still applied as the winding-up order had been discharged, not rescinded.

The judge found that the administrators had jurisdiction to make a validation order application and validated the transactions, as requested.

HSBC UK Bank PLC v Ethical Power Connections Ltd & ors [2026] EWHC 1695 (Ch)

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