A Company, In the Matter Of

Factual and Procedural Background

The applicants, appointed as joint administrators of Company A on 26 November 2024 by its directors, sought court orders relating to the administration of Company A, which is part of a larger corporate group and holds shares and debts from group companies but did not trade. On 31 January 2025, the court heard the applicants' application for: (1) an order under r 3.45(1)(a) of the Insolvency (England and Wales) Rules 2016 permitting exclusion of creditor debt amounts from the statement of affairs to protect the commercial value of shares; (2) a private hearing to prevent publicity that could undermine the hearing's purpose; and (3) an extension of time to file the statement of affairs and proposals under Sch B1 paragraph 49(5) of the Insolvency Act 1986.

Prior to the administrators’ appointment, Company A entered into several agreements disposing of shares through a share sale agreement, declaration of trust, security agreement, and call option. The consideration was a reduction of indebtedness owed to group companies rather than payment. The applicants are considering exercising the call option, challenging the transaction under antecedent transaction provisions, or a hybrid option. They intend to seek advice on valuation and marketing of the shares to potential purchasers, including competitors or private equity firms. Disclosure of the statement of affairs in the usual form could reveal confidential commercial information, potentially disadvantaging the sale process.

Legal Issues Presented

1. Whether the court should order exclusion of certain creditor debt information from the statement of affairs pursuant to r 3.45(1)(a) Insolvency Rules 2016 to protect commercial interests.
2. Whether the hearing should be conducted in private under CPR 39.2(1) given the risk that publicity would defeat the hearing’s object or disclose confidential information.
3. Whether an extension of time should be granted under Sch B1 paragraph 49(5) Insolvency Act 1986 to file the statement of affairs and proposals.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analyzed the applicants’ request for relief by reference to the relevant insolvency rules and procedural requirements. It acknowledged the general principle of open justice but accepted that exceptions exist when publicity would defeat the hearing’s purpose or disclose confidential information, as set out in CPR 39.2(3)(a) and (c). The court found the consideration paid in the share sale to be confidential commercial information, disclosure of which could harm the administration by reducing the value of assets for sale.

In applying rule 3.45 of the Insolvency (England and Wales) Rules 2016, the court considered established authorities confirming that disclosure should be limited when it would prejudice the administration’s conduct. Precedents demonstrated that courts have discretion to exclude sensitive information to protect commercial interests and the administration process. The court also balanced the interests of creditors, noting the small number of known creditors who could consult each other, mitigating concerns about limiting disclosure.

Regarding the extension of time for filing the statement of affairs and proposals, the court accepted the legal basis under Sch B1 paragraph 49(5) and related provisions, finding it appropriate to grant an extension to allow the applicants to proceed with the hearing and consider their options.

Holding and Implications

The court GRANTED the applicants’ application:

• Permitting exclusion of the amount owed to creditors from the statement of affairs and associated documents to protect commercial confidentiality and the administration process.
• Ordering that the hearing be held in private to prevent publicity that would defeat the hearing’s object or disclose confidential information.
• Extending the time for filing the statement of affairs and proposals beyond the statutory eight-week period.

The decision directly affects the administration of Company A by enabling the administrators to manage sensitive commercial information carefully and conduct the administration without prejudicing the potential sale of valuable assets. No new legal precedent was established; rather, the court applied and reinforced existing principles on confidentiality, open justice exceptions, and procedural flexibility in insolvency contexts.