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  • Company Voluntary Arrangements and Administrations
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Horton v Henry: The Death of Raithatha?

An article by Simon Passfield

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Company Voluntary Arrangements and Administrations


Detailed explanation of the advantages and disadvantages of CVAs

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Company Voluntary Arrangements and Administrations provides the vital information that all insolvency practitioners need to make informed decisions on the effective procedure for the use of CVAs and administrations. The book provides a detailed explanation of the advantages and disadvantages of CVAs and administrations, the prescribed procedure and the likely problem areas to select the best course of action. In addition, the section on administrations has been extended.

 This new edition reflects changes in legislation, particularly the detailed procedures set out in The Insolvency (Amendment) Rules 2010, together with new case-law including:
  • Re Kayley Vending Ltd
  • Re Eurodis Texim Electronics SA
  • Charalambous v B & C Associates
  • Bank of Scotland plc v Targetfollow Properties Holdings Ltd
  • Minmar (929) Ltd v Khalatschi
  • Re Capitol Films Ltd
  • Introduction
  • The Procedure
  • The Nominee and His Report
  • Costs
  • The Proposal
  • Creditors
  • The Creditors' Meeting
  • Implementation and Supervision of the CVA
  • Breach and Failure of a CVA
  • Taxation
  • Partnership Voluntary Arrangements
  • The Administration Procedure


  • Sample Engagement Letter
  • Sample Proposal (Including Standard Conditions)
  • Sample Nominee's Report
  • Sample Chairman's Report
  • Sample Annual Report
  • Sample Final Report Following Breach
  • HMRC Helpsheet
  • Forms
  • Statement of Insolvency Practice No 3
  • Statement of Insolvency Practice No 9
  • Statement of Insolvency Practice No 16
 Read the full contents listing here
Reviews of Previous Edition
"well researched, comprehensive and readable ... covering every conceivable aspect of company voluntary arrangements. Its simple and clear explanation of the legal and practical issues will be of assistance to both insolvency practitioners and those who advise"
New Law Journal

"be you a barrister or solicitor or for that matter, accountant or academic - you'll need this book if you practice or advise in the area of company voluntary arragements"
 "carefully researched work of reference "

Phillip Taylor MBE and Elizabeth Taylor of Richmond Green Chambers
Only 3 years have passed since the last edition of this book, but both the courts and Parliament have been active (or perhaps a better word is ‘hyperactive’). The Insolvency Practice Direction 2012 together with numerous decisions of the courts have now been incorporated into the text. Sadly the speed with which the detail of the law changes means that the gaps between editions get increasingly shorter.

 We must extend our thanks to our publishers, Jordan Publishing Ltd, and especially to Mary Kenny and Cheryl Prophett who have seen the text through production with their usual easy professionalism and understanding. The views expressed in the text, for which we take joint responsibility, are personal to us and should not be attributed to any firm or organisation with which we are associated. Any errors, of course, are our own.

 Finally we both wish to express our gratitude to our wives for their encouragement and fortitude in bearing with husbands who aspire to be writers in what should be part of their family’s spare time.

     Geoffrey M Weisgard, 
     Michael Griffiths,
     March 2013

 12.76 In Minmar (929) Ltd v Khalatschi the appointment of administrators was set aside on the grounds that the directors did not have the authority to make the appointment, and that notice had not been given as required under the Rules.

 12.77 A somewhat easier approach to a defect in the appointment process is to be found in Hill & Pope v Stokes. The directors of the company wished to appoint administrators and, as required, served notice upon its bank which held a qualifying floating charge. However, para 26(2) of Sch B1 to the Insolvency Act 1986 also requires notice to be served on other persons prescribed in the Insolvency Rules. These include any enforcement officer charged with execution or other legal process against the company and any person who has distrained against the company or its property. Certain landlords had distrained and there were also bailiffs involved with the company, all this to the knowledge of the directors. No such notice had been served on these people. The error was spotted quickly though not before the administrators had sold some stores owed by the company, closed others and made a number of employees redundant. An application was made to the court for confirmation of the validity of the administrators' appointment. HHJ McCahill QC held that the failure had not been fatal in this case. There is no minimum period of notice in the case of the prescribed persons as there is with the holder of a qualifying floating charge who must be given 5 days' notice. This suggested that the purposes for the giving of notice must be different. In the case of the floating charge holder it was so that he could make his own appointment. In the case of bailiffs and distrainers it was to prevent their innocently breaching the interim moratorium. However, it might be that this is a rather weak decision. The judge had directed that both the bailiffs and landlords be served with copies of the application and none objected or even appeared. Thus there would have been no adversarial argument put before the court.

 12.78 A harsher approach was adopted in Re Frontsouth (Witham) Ltd. In this case administrators had overlooked the need to get the consent of two secured creditors to an extension of the administration for a further 6 months. The administrators sought to get around this by the use of r 7.55 of the Insolvency Rules 1986. This states:
 ‘No insolvency proceedings shall be invalidated by any formal defect or by any irregularity, unless the court before which objection is made considers that substantial injustice has been caused by the defect or irregularity, and that the injustice cannot be remedied by any order of the court.'
 Counsel for the administrators had produced evidence that registrars in the Companies Court had been willing to allow r 7.55 to be used to rectify the failure to obtain secured creditors' consents in cases such as this. Henderson J held that the rule could not be used in circumstances such as this because the defect was fundamental:
 ‘If and to the extent that a practice has developed in the Companies Court of purporting to waive defects of this or a similar nature in reliance upon rule 7.55, such practice has no solid foundation in law and must cease. It might well be convenient if the power to waive defects of a relatively technical nature in the out of court appointment of administrators, but rule 7.55 cannot be pressed into service for that purpose, and in my view such a change could only be brought about by legislation.'

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