WW Realisation 1 Ltd

The court may direct administrators and liquidators to distribute surplus funds without reserving for liabilities or expenses that have not been claimed by a specified deadline. The jurisdiction derives from Insolvency Act 1986, section 168(3), for liquidators, and paragraph 63 of Schedule B1 for administrators. The court must protect potential expense claimants while avoiding indefinite delay. A direction is appropriate where creditors have received adequate notice and opportunity to claim, and the final deadline allows a reasonable further period, here at least 28 days after notification.

The joint administrators of an insolvent former retailer sought orders ending the administration, placing the company into liquidation and appointing two administrators as liquidators. They also sought directions permitting the remaining surplus to be distributed to a secured creditor after provision for claims already made, without reserving for unsubmitted claims by landlords and local authorities.

The application raised the court’s jurisdiction to give directions concerning administration expenses and the appropriate protection for creditors who had not yet lodged claims.

1. Jurisdiction. The court had jurisdiction under section 168(3) of the Insolvency Act 1986 to direct liquidators, and under paragraph 63 of Schedule B1 to direct administrators. The jurisdiction could be exercised in relation to expense claims as well as provable debts.
2. Relevant approach. The established liquidation jurisdiction permitted distribution without provision for claims lodged after a specified date, as illustrated by Re Armstrong Whitworth Securities Company Limited and discussed in Re RR Realisations Limited. There was no reason why the equivalent administration jurisdiction should operate differently.
3. Balancing protection and finality. Potential expense claimants had to be properly protected, but the administration and liquidation could not be delayed indefinitely while creditors decided whether to claim. The court considered the existing correspondence, the commercial nature of the landlords and local authorities, and their knowledge of insolvency procedures.
4. Directions. The circumstances justified the requested directions. The order was conditional on notifying the relevant creditors of its effect and allowing a final claims period of at least 28 days after a further letter. The surplus could then be distributed without provision for claims not made by the deadline.