Approval of Administrators' Proposals: What to do in the Face of Apathy?

    December 2013
    The Administrators of a group of companies put their proposals before the creditors who failed to approve the proposals. Indeed, they failed to vote at all. The Administrators applied for the proposals to be approved by the Court. It was held that such approval was not required unless the proposals were actively opposed by creditors. In the absence of such approval, the judge considered that the administrators have the power to act in their own discretion. The judge also used the case to comment on the standard form of proposals used by most insolvency practitioners. It was acknowledged that in the absence of creditor approval, administrators are required to obtain Court approval for the basis of their remuneration under rule 2.106 of the Insolvency Rules 1986 (“the Rules”) and so it is clear that, whilst the proposals themselves might not require approval by Court order, an application for approval of the basis of remuneration will always be required.