An administrators’ appointment automatically ends after one year, unless steps are taken to extend it. The Enterprise Act introduced a new streamlined process for moving quickly and easily from administration to creditors’ voluntary liquidation, just by filing a notice at Companies House under para 83(3) Sch B1 of the Insolvency Act (IA)1986. Problems have arisen where that notice has been filed very late in the day and not received before the administrators’ term of office automatically ends.

The past eighteen months have seen a marked increase in the use of the Company Voluntary Arrangement (“CVA”) by retailers to reduce their lease liabilities and win the release of onerous parent company guarantees, with several high street names going through the process. Although this practice received cautious support from landlords, real concern continues to be voiced over the practice of “guarantee stripping”.

In a blow to administrators that will surely impact on the timings of any administration, most particularly those involving a large property portfolio, HHJ Purle, sitting in the High Court, has handed down a decision that will have ramifications potentially as serious as those of Re Trident Fashions for administrators in considering how long to remain in office, or indeed whether to accept an appointment at all.