An administrator appointed either by the court or using the out of court procedure takes office for an initial period of 12 month. The administrator can apply for an extension of his term of office and must do so before the expiry of the twelve month period or his appointment will automatically cease. Unfortunately the need to make this application is often only addressed close to the expiry of the 12 month term. The Court of Session this month formally clarified the information which it will require to be produced with an application for an extension of an administrator's appointment. Along with the application there must be submitted:-
- the letter or report which intimated to the creditors the intention to extend the period of administration, which must have been given in time to give creditors a reasonable opportunity to lodge objections with the administrators; and
- letter(s) or email(s) from the secured creditor(s) confirming their consent to the extension.
In England, a practice direction issued at the end of February requires applications for extensions of appointment to be made at least one month before the end of the administration, except in exceptional circumstances. Whilst no formal time limit has been introduced in Scotland it is clearly sensible to make the application as early as possible.
As administrations become increasingly complex extensions are becoming more common. The clarification by the court of the supporting documentation which must be produced is to be welcomed in assisting the efficient management of administration appointments
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
