Green v Group Ltd & Ors

When administrators are proposed for appointment as liquidators, the court must consider the proper operation of the liquidation and justice between all interested persons. Majority creditor support is important but not decisive. The proposed liquidator must be independent, act for creditors as a whole, and investigate relevant claims, but is not required to conduct a general public inquiry into alleged misconduct or data-protection breaches. Proposed administrators must make reasonable enquiries relevant to their certificate and prospective duties, but need not investigate every piece of company litigation before appointment. A funding arrangement with a major creditor does not itself disqualify office-holders, although independence must be kept under review.

The proceedings concerned petitions by Vincent John Green and Mark Newman, as joint administrators, concerning six companies associated with the Cambridge Analytica business. Professor David Carroll opposed the administrators’ appointment as joint liquidators and their release, alleging lack of candour, incompetence, bias, misconduct, conflicts arising from funding, and failure to investigate data-related claims.

The companies’ creditors had approved the administrators’ proposals for winding up and appointment as liquidators. The central issues were whether the administrators were unsuitable for further appointment and whether their discharge and release should be granted.

1. Appointment as liquidators. The court applied the settled guidance that the fundamental question was what would best promote the proper operation of the liquidation and justice between all interested persons. Majority creditor support was a major factor, but creditors had no absolute right to choose the liquidator. The appointee must be independent, act in the interests of creditors as a whole, investigate relevant claims, and avoid conflicting duties or purposes.
2. Candour and pre-appointment enquiries. Proposed administrators owe duties connected with their certificate and prospective office. They must make reasonable enquiries bearing on those matters, but are generally not required before appointment to discover every piece of company litigation or assess the effect of the statutory moratorium on it. Their failure to disclose Professor Carroll’s proceedings therefore did not establish a breach.
3. Scope of insolvency duties. Administrators are required to pursue the statutory objectives efficiently, investigate directors’ conduct and potential recoveries, and co-operate with regulators where that does not impede the administration. They have no general duty to investigate possible breaches of duties owed by the company to individual data subjects, or to turn the insolvency into a public inquiry into the business model.
4. Data-protection enforcement. The administrators were not themselves data controllers merely because they administered the company. However, the relevant question was what the company had to do to comply with the Enforcement Notice and what the administrators could do within their management powers to enable compliance. Their decision that compliance costs were disproportionate did not amount to misconduct on the evidence.
5. Outcome. The joint administrators were appointed joint liquidators of the Relevant Companies. Their discharge and release were directed to take effect 28 days after their final report, allowing creditors to raise questions.