High Court clarifies meaning of “the directors” in applications for an administration order
William Angas and Justin McConville were delighted to assist their client, a company director, in dismissing an application for an administration order which had been brought by a co-director without his agreement as the other director on the board.
The decision of David Halpern KC, sitting as a High Court Judge, in Re LYHFL Limited [2023] EWHC 2585 (Ch) was handed down today, and is of note in deciding that one of two directors has no power to apply to the Court for an administration order, without the approval of the majority of the directors and without a valid board resolution.
Impact of this decision
What our client had to say:
Our client had this to say about the excellent result: “The business is not insolvent by any measure and is trading successfully as our happy customers and suppliers will attest to. Nevertheless, the application proved an enormous distraction to the business and was very stressful to me given the dire potential outcome sought by my co-director. I am indebted to Will, Justin, and all the team at PDT (now Cripps), as well as my barrister, James Knott of 4 Stone Buildings Chambers and Tony Murphy of Harrisons Business Recovery, for their hard work and expert guidance. PDT responded to the application at very short notice and I was impressed how they left no stone unturned and put my response in a manner which the Judge obviously found very compelling.”
Will Angas added: “This decision provides very helpful guidance to company directors and their advisers regarding the law concerning how and when directors may apply to the court for an administration order. More importantly, we were very pleased to be able to fight off the application to ensure the continued trading of the business and protect the livelihoods of its staff.”
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