NEW RULES ON PRE-ADMINISTRATION COSTS

Insolvency Practitioners have been eagerly awaiting the implementation on 6 April 2010 of the Insolvency (Amendment) Rules 2010 (“New Rules”). In addition to the many modernising changes made by the New Rules is the long awaited inclusion of what was believed to be a statutory entitlement to recover pre-appointment costs such as in negotiating a pre-pack. as an expense of the administration (New Rule 2.67(1)(h)).

In a recent case1, the High Court concluded that it was right to sanction schemes of arrangement which formed part of a wider debt restructuring that excluded out-of-the-money junior creditors. In doing so, it valued the distressed companies on a going concern basis.

Background