A Company, Re

The court may restrict disclosure in an administration where disclosure would be likely to prejudice the conduct of the administration. The power is focused and does not permit unlimited suppression of information. Commercial sensitivity and the likely effect of disclosure on the administration are relevant considerations. A hearing may be held in private where publicity would defeat its object or would damage the confidentiality of confidential information, subject to the general principle of open justice. The court may also extend the period for filing administrators’ proposals after expiry where the statutory provisions and procedural rules permit such an extension.

The joint administrators of a non-trading group company sought orders permitting them to exclude information about creditors from the company’s statement of affairs, requiring the application to be heard in private, and extending time for filing their statement of affairs and statement of proposals.

The administrators were considering whether to exercise a call option or challenge a recent share sale. They feared that disclosure of the consideration would give prospective purchasers a commercial advantage and depress the value obtained for the company’s assets. The court considered the requirements for private hearings, limited disclosure in an administration, and extension of the statutory filing period.

1. Private hearing. The general rule under CPR 39.2(1) is that hearings are public. A private hearing may nevertheless be ordered under CPR 39.2(3)(a) where publicity would defeat the object of the hearing, or under CPR 39.2(3)(c) where confidential information is involved and publicity would damage confidentiality. The court accepted the administrators’ evidence about the potential commercial detriment and held that the share-sale consideration was confidential. The application therefore justified a derogation from open justice.
2. Limited disclosure. Rule 3.44 of the Insolvency (England and Wales) Rules 2016 applies where disclosure would be likely to prejudice the conduct of the administration. Rule 3.45 is tightly focused. Satisfaction of the threshold does not confer an unlimited power to restrict disclosure. The court applied the natural meaning of prejudice to the conduct of the administration and accepted that the anticipated sale process could be adversely affected by disclosure.
3. Authorities concerning confidential customer or creditor information confirmed that commercial considerations may be taken into account. Although some authorities involved materially different facts, they supported the availability of relief where disclosure would impair the administration or the value realised for creditors.
4. Extension of time. The eight-week period in Schedule B1 paragraph 49(5) of the Insolvency Act 1986 had expired. Paragraph 49(8), read with paragraph 107, permitted variation of the period after expiry. Schedule 5 paragraph 3 of the Insolvency (England and Wales) Rules 2016 also imported CPR 3.1.2(a), permitting the court to extend the time for compliance with a requirement of the Rules.
5. The requested orders were made substantially as sought. The order preserved a right for any affected party to apply on notice to vary or discharge it.