Paragraph 83 of Schedule B1 to the Insolvency Act 1986 provided a procedure for moving a company from administration to creditors’ voluntary liquidation, which applied if the administrators thought a distribution would be made to the company’s unsecured creditors. The administrators of a company, thinking that a dividend was payable to a preferential creditor, sent a notice to the Registrar of Companies that paragraph 83 applied. The registrar, in compliance with paragraph 83(4), registered the notice. An issue subsequently arose about whether preferential creditors were “unsecured creditors” and, therefore, whether the administrators’ notice that paragraph 83 applied was valid and the company had moved to creditors’ voluntary liquidation on registration of the notice.
On the administrators’ application for a declaration as to the effect of their notice—
Held, application granted. Since preferential creditors did not hold any security over the company’s property, on the face of it they were unsecured creditors for the purposes of paragraph 83 of Schedule B1 to the Insolvency Act 1986. The context of paragraph 83 did not require the meaning of unsecured creditors to be restricted to non-preferential unsecured creditors. In any event, the administrators plainly “thought” that the conditions were satisfied, which was all that was required for paragraph 83 to apply. Accordingly, the administrators’ notice sent to the Registrar of Companies was valid, and effectively moved the company from administration to creditors’ voluntary liquidation (paras 2, 9–11, 13, 14).
Simon Passfield (instructed by Stephens Scown LLP) for the administrators.