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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

30 APR 2010

Administration considered - MccArtney & Ors v Unite The Union & Anor [2010] EWHC 826 (Ch) (22 April 2010)

Mr Justice Norris has handed down his judgment in MccArtney & Ors v Unite The Union & Anor [2010] EWHC 826 (Ch) (22 April 2010). The case concerns an administration and issues around employment claims. As the learned judge notes:

"The object of the administration is to rescue the business of the Company as a going concern. This requires participation in a series of co-ordinated asset sales involving a reorganisation of the various individual global business lines of the Nortel Group. This of itself involves the maintenance of the various businesses pending sale and the provision of transitional services following any sale. The administration of the Company is therefore a true trading administration. Many of the Company's employees were retained to maintain the current business, to participate in a reorganisation of the global business lines prior to sale, and to provide the requisite transitional services to purchasers of businesses. Although the jobs of many employees were thereby preserved, there had to be some redundancies."

The learned judge continues:

"The claims with which I am concerned are all monetary claims. The Company has gone into administration because the monetary claims it faces far exceed the assets available for their payment. The object of the administration is to exploit and deploy those assets "in the interests of the Company's creditors as a whole" i.e. in the interests of all those who have monetary claims. To enable the Administrators to discharge that function paragraph 43(6) imposes a general rule that those with monetary claims against the Company may not pursue them. The Administrator is thereby enabled to dispose of the assets and so to realise a sum for distribution either within the administration, or through a scheme of arrangement or company voluntary arrangement, or by exit into a liquidation."

The learned judge concludes:

"That is sufficient to found my conclusion that the claims now advanced by Unite the union and the 37 applicants are not "exceptional" so as to warrant the grant of permission for their continuation and the lifting of the moratorium otherwise applying in the administration: and I so hold. I will therefore refuse the applications."
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