Can one director appoint administrators where the other opposes?

4th December 2023

3PB's commercial law barrister Alexander WhatleyAlexander WhatleyCall: 2014 analyses the case of Abigal Boura v Lyhfl Limited [2023] EWHC 2585 (Ch), a case in which the High Court had to consider whether one director has standing to apply to court for the appointment of an administrator in circumstances where there is no majority of the board and no valid resolution of the board in favour of the application.

In reaching its decision, the High Court examined the cases of Re Brickvest Ltd [2019] EWHC 3084 (Ch) and Minmar (929) Ltd v Khalastchi [2011] BCC 485. In this landmark judgement, the court held that a single director of a company that had two directors was not entitled to act alone in appointing an administrator to the company. The case involved a company with two directors, who had been in a personal relationship which had subsequently ended. One of them applied to the court to appoint an administrator to the company on the grounds that the company was unable, or was likely to become unable, to pay its debts. Under the Insolvency Act 1986, an appointment to the court to appoint an administrator can be made by (among other persons) “directors of the company”.

Alexander considers the impact of the Court’s decision on company directors, insolvency practitioners and any legal professional seeking to resolve a statutory ambiguity. You can read his briefing here.