BusinessBusiness RecoveryIPs given less time to apply for administration extension

IPs given less time to apply for administration extension

New rules force insolvency practitioners to apply for administration extensions earlier

INSOLVENCY PRACTITIONERS will need to apply much earlier if they want extra time to complete a corporate administration after a High Court decision.

Currently an IP can file a request to extend an administration, which lasts 12 months, four weeks before its expiry date.

However, registrars in the companies branch of the High Court are now requesting at least six weeks notice before an extension can be granted, according to law firm CMS Cameron McKenna.

As a consequence, IPs and their solicitors need to plan their extension application well in advance of the expiry of the administration, taking into consideration the complexity and size of the case.

The purpose of the change is to give the court time to decide whether to make a decision based on the application received or to call a hearing.

A statement from CMS Cameron McKenna said the increase is also in response to applications filed so late it causes “unwelcome disruption” to the court’s schedule.

Any late filing penalties will come from the IPs’ own pocket as charges incurred are excluded from the cost of the administration.

Practitioners will be excluded from fines and allowed to file an extension late if they have “unusual reasons”. However, there has been no clarification on what those reasons could be.

 

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