Mable Commercial Funding Ltd (In Administration), Re

On an application under paragraph 98 of Schedule B1 to the Insolvency Act 1986, the court’s function is limited to fixing the time when an administrator’s discharge from liability takes effect. The discharge itself follows automatically when the appointment ends.

The court should ordinarily be satisfied that the administrators have considered whether potential claims arise from their conduct and that creditors have been notified of the application, including any claims or objections. The discharge should not take effect before the administrators cease office and will ordinarily be delayed for a further period, commonly 28 days, to allow final claims or review. A specific justification for obtaining the discharge is unnecessary.

The joint administrators of Mable Commercial Funding Ltd, a Lehman Group holding company in administration since 23 September 2008, applied for an order fixing the time of their discharge under paragraph 98 of Schedule B1 to the Insolvency Act 1986.

The administration had achieved its purpose. Mable’s assets had been realised and distributed, it had no remaining assets or material liabilities, and the administrators proposed to vacate office by notice under paragraph 84(1) of Schedule B1. The central issue was whether the court should fix the time of discharge and, if so, when it should take effect.

1. The application was granted. The administrators were ordered to be discharged in accordance with the draft order, with discharge taking effect 28 days after registration of the notice under paragraph 84(1) of Schedule B1, subject to notified claims.
2. Under paragraph 98(1) of Schedule B1, discharge from liability is automatic when the administrator’s appointment ceases. The court’s discretion concerns only the timing of that discharge.
3. The court’s principal inquiries were whether any administrator was subject to potential claims and whether creditors had been notified of the application, including any notified claims or objections. These principles were explained in Re Nortel Networks France SAS [2019] EWHC 2447 (Ch) and reflected in Re Lehman Brothers International (Report) [2020] EWHC 2995 (Ch).
4. The discharge ordinarily takes effect only after cessation of office and after a further period, usually about 28 days, allowing review of the administration and advancement of claims. Claims for misfeasance under paragraph 75 of Schedule B1 are not excluded.
5. The court was satisfied that the application had been properly notified, no objection had been made, the administrators had considered potential claims, and Mable’s administration had no continuing purpose. No specific prejudice or other justification for discharge was required.