Extending administrators' term of appointment

In Joint Administrators of PSL2021 Realisations Ltd (In Administration), Noters [2024] CSOH 105 the court considered an application by the joint administrators of a company in administration to extend the administrators’ term of office.

The company entered administration on 19 November 2020, with the administrators’ term fixed for a 12 month period by Schedule B1 of the Insolvency Act 1986. 

The administrators' term was extended by consent of the company’s secured and preferential creditors until 18 November 2022, and then by application to the court on a further 2 occasions (extending the administration period until 17 November 2023 and then to 16 November 2024).

The instant application, seeking the court’s permission to extend the administrators’ term for a further 12 month period, was considered on 21 November 2024.

In considering the application, the court noted that the administrators were not automatically entitled to an extension of their term. The decision of whether or not to grant the extension, and for how long, was a matter of the court’s discretion. 

When considering extension applications, the court should have regard to the entire circumstances of the matter, including:

1. The likelihood that the administrators would be able to achieve their objectives within the extension period
2. Whether an extension to the administration period would prejudice the company’s creditors
3. The creditors’ views on the requested extension

The court recognised that a balance needs to be struck between providing sufficient time for the administration to be conducted properly, without permitting administration to run on unnecessarily without pressure to reach a timely resolution. 

In the instant case, the court extended the administration period until 16 November 2025.

Joint Administrators of PSL2021 Realisations Ltd (In Administration), Noters [2024] CSOH 105

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