Vol 17 (2020) - Issue 2

Article preview

Re Moss Groundworks Limited [2019] EWHC 2825 (Ch)

Summary

In Re Moss Groundworks Limited, the High Court was asked to make an administration order in relation to Moss Groundworks Limited ('MGL') in connection with a proposed pre-pack sale of MGL's assets and business to a connected party. The court declined to make the order on the basis the evidence before the court, in the form of a report from the proposed administrators (the 'Report'), did not explain how the marketing essentials in Statement of Insolvency Practice 16 ('SIP 16') had been complied with.

The court also noted that, even though the proposed sale was to a connected party, there was no suggestion that the 'pre-pack pool' had been consulted, and that on the evidence before the court it was not possible to be satisfied that the case was not an abuse of the administration process.

The case serves as a reminder not to take the court’s powers to appoint administrators for granted. It also comes at an interesting time, with the sunset date on government powers to legislate in this area ending on 26 May 2020.