Tailby , Re TPS Investments (UK) Ltd

On an application to extend an administrator’s term, the court should consider why the administration remains incomplete, whether another insolvency regime is more suitable, whether the extension is likely to achieve an objective of administration, and the appropriate duration. The court has a discretion under paragraph 76(2) of Schedule B1 to the Insolvency Act 1986. An extension may be justified where valuable or disputed assets remain unresolved, continuation is proportionate, and there is a realistic prospect that the administration will achieve a statutory purpose. The court may also record a third party’s consent to the order without determining that party’s disputed status or proprietary claims.

Mark Grahame Tailby, the sole administrator of TPS Investments (UK) Limited, applied under paragraph 76(2) of Schedule B1 to the Insolvency Act 1986 for a further nine-month extension of the administration. The application was the fifth court application for an extension and was unopposed. The company retained a valuable and complex development opportunity, while competing trust claims and charged assets remained unresolved. The application also raised whether the order should record the consent of entities asserting proprietary interests in the assets. The central issues were whether continuation of the administration was appropriate and how the order should reflect that consent.

1. Extension granted. The court granted the administrator a further nine-month extension. The administration remained incomplete because the sale of a valuable development opportunity had not concluded and the Alpha Companies’ alleged trust interests remained to be determined.
2. Applications of this kind generally require consideration of four questions: why the administration has not been completed; whether another insolvency regime is more suitable; whether the extension is likely to achieve the purpose of administration; and, if an extension is appropriate, its proper duration.
3. No alternative regime was more suitable. A move to creditors’ voluntary liquidation under paragraph 83 of Schedule B1 was unavailable because it was not yet known whether assets would remain for distribution to unsecured creditors. Compulsory liquidation would involve disproportionate administrative, statutory and regulatory costs. Continuing the administration was the most proportionate and cost-effective course.
4. The administrator was not satisfied that there was no prospect of a surplus. In the circumstances, dissolving the company on the basis of the secured creditor’s assertions alone might breach duty. The remaining property was being marketed and continuation at minimal cost could assist in achieving the statutory purposes of administration. The pandemic made a precise timetable speculative, but nine months was an appropriate period.
5. The order could record the Alpha Companies’ consent. That recital recorded only a fact and did not acknowledge their status or determine their proprietary claims, which remained for future determination in pending litigation.
6. The judgment also gave guidance for remote hearings: advocates should be engaged early to identify documents essential to the hearing, and electronic bundles should contain a searchable index or sequential pagination.

First-instance decision. No appellate history is stated in the judgment.