Insolvency Act 1986, section 42

General powers

Part III Receivership

(1)The powers conferred on the administrative receiver of a company by the debentures by virtue of which he was appointed are deemed to include (except in so far as they are inconsistent with any of the provisions of those debentures) the powers specified in Schedule 1 to this Act.

(2)In the application of Schedule 1 to the administrative receiver of a company—

(a) the words “he” and “him” refer to the administrative receiver, and

(b)references to the property of the company are to the property of which he is or, but for the appointment of some other person as the receiver of part of the company’s property, would be the receiver or manager.

(3)A person dealing with the administrative receiver in good faith and for value is not concerned to inquire whether the receiver is acting within his powers.

Definitions used in section 42 3

administrative receiver

(2) In this Chapter “administrative receiver” means—

(a)a receiver or manager of the whole (or substantially the whole) of a company’s property appointed by or on behalf of the holders of any debentures of the company secured by a charge which, as created, was a floating charge, or by such a charge and one or more other securities; or

(b)a person who would be such a receiver or manager but for the appointment of some other person as the receiver of part of the company’s property.

Defined in s.29(2) · see it in the full Act
the company

2 Section 233B does not apply in relation to a contract for the supply of goods or services to a company (“the company”) where any of paragraphs 3 to 11 applies.

Defined in Sch.4ZZA para.2 · see it in the full Act
company

(1) In this Chapter “company” means a company registered under the Companies Act 2006 in England and Wales or Scotland.

Defined in s.28(1) · see it in the full Act

Cases considering section 42 3

Sutton v GE Captial Commercial Finance Ltd & Ors

[2004] EWCA Civ 315 · 19 March 2004Limits

Section 42(1) was identified as the source of an administrator’s general powers in Schedule 1, but the court considered that Schedule 1 added nothing to the powers conferred by the debenture in this case. (see para [35])

Ace Paper Ltd v Fry & Ors

[2015] EWHC 1647 (Ch) · 18 June 2015Defines

Identifies section 42 as one of the statutory provisions to which the necessary-or-incidental wording in Schedule 1 relates. It provides context for interpreting “incidental” and is not applied to decide the appeal. (see para [49])

Nortel Networks UK Ltd & Ors, Re Insolvency Act 1986

[2014] EWHC 2614 (Ch) · 17 July 2014

The court confirmed that the joint administrators had power to enter into and perform the Settlement Agreement under section 42, subject to the limited supervisory role considered on the application. (see paras [3]; [34])

What each judgment says about section 42 is in the case-law panel in the full Act.