Wow, there’s a title for an eye catching Blog. If there was ever a sexy way to get a compliance manager going, it’s a good quote from the Insolvency Act 1986, the more amended the better.
Alright, so I’ve got your attention. Now what??
This is a cracking paragraph, carefully inserted where no-one would expect to find it. What it says, in a nutshell, is that to get your release from a ‘new style’ administration, you need a resolution from a meeting of creditors or approval from the court.
Please note that this is different from the discharge issue referred to in earlier Blogs. This is the great escape, the actual release from liability for your actions as administrator. Now our dear friends in policy section, bless them, have a habit every now and again of moving the goalposts further and more sneakily than your regulators ever try. In this case, they have taken a perfectly acceptable routine whereby you get your release from the creditors at the final meeting or from the final meeting itself if no-one turns up or votes against. They have then tried to think of a novel way of keeping me in business and given you a whole new ambush to negotiate.
You now have to consider not only that you may need to get a resolution for your release, but also that you need to consider when to do it. One VERY LARGE firm gets the resolution with its proposals. I cannot say that I am too happy with the idea of you seeking an approval that, roughly speaking, reads “These proceedings may end in a CVL and if they do I want you to approve my release from things I haven’t even done yet”. Alright, I’m exaggerating, but you get the point.
Another fairly big firm waits until the administration is discharged and asks for the resolution in the subsequent CVL. At least, by that time, the creditors know what they are releasing the IP from, but do the creditors of a CVL, a completely different legal estate, have the power to release the administrator of a prior, discharged, administration?
I reckon that your safest bet, unless you are going straight from proposals to CVL, is to send out a vote by post some time close to your discharge. Obviously, I could not condone racking up your time costs in an administration, with all of the Leyland Daf avoiding implications that carries, by calling a meeting, so use the postal provisions.
p.s. There is just a sneaking possibility that this paragraph only applies to vacation on death, retirement etc. As I read it, it applies to any kind of appointment-ending as long as you were appointed by a chargeholder or the companies or directors, but its positioning in the schedule means it is possible that I am wrong. If anyone has received a formal legal opinion or heard of some relevant case law, let me know and I'll gladly distribute the knowledge on this Blog so that we can all benefit.
