New deadline for applications to extend administration

Registrars at Companies Court have recently indicated that any application to extend an administration should be made at least 6 weeks before the administration is due to expire, as opposed to the 4 week period that was previously required.
 
The reason for the increase in timescale is to allow the Court time to consider whether to deal with the application on paper or list it for a hearing.

In the circumstances of a particular case, "unusual reasons" may justify a late application but in the absence of any guidance as to what constitutes an "unusual reason" administrators are encouraged to treat this caveat with caution. The penalty for failing to comply with the new 6 week deadline is an order excluding the administrator's costs of the application from being paid as an administration expense. This penalty has already been applied in certain cases breaching the 4 week rule.

The Court is considering issuing formal guidance in the form of a Practice Note or Direction. We will update you with any further developments.

For further information, please contact Sacha Pickering at sacha.pickering@michelmores.com or on 01392 688688.