(1)A special administration order is an order of the High Court made in accordance with section 24 or 25 below in relation to a company holding an appointment under Chapter I of this Part and directing that, during the period for which the order is in force, the affairs, business and property of the company shall be managed, by a person appointed by the High Court—
(a)for the achievement of the purposes of such an order; and
(b)in a manner which protects the respective interests of the members and creditors of the company.
(2)The purposes of a special administration order made in relation to any company shall be-
(a)the transfer to another company, or (as respects different parts of the area to which the company’s appointment relates, or different parts of its undertaking) to two or more different companies, as a going concern, of so much of the company’s undertaking as it is necessary to transfer in order to ensure that the functions which have been vested in the company by virtue of its appointment may be properly carried out; and
(b)the carrying out of those functions pending the making of the transfer and the vesting of those functions in the other company or companies (whether by virtue of the transfer or of an appointment or variation which replaces the former company as a relevant undertaker).
(3)Schedule 3 to this Act shall have effect for applying provisions of the M1Insolvency Act 1986 where a special administration order is made.
(4)Schedule 2 to this Act shall have effect for enabling provision to be made with respect to cases in which a company is replaced by another as a relevant undertaker, without an appointment or variation under Chapter I of this Part, in pursuance of a special administration order.
(5)In this section “business” and “property” have the same meanings as in the M2Insolvency Act 1986.
Modifications etc. (not altering text)
C1S. 23(1) restricted (15.11.1999) by S.I. 1999/2787, art. 4
Marginal Citations
(1)If, on an application made to the High Court by petition presented—
(a)by the Secretary of State; or
(b)with the consent of the Secretary of State, by the Director,
that Court is satisfied in relation to any company which holds an appointment under Chapter I of this Part that any one or more of the grounds specified in subsection (2) below is satisfied in relation to that company, that Court may make a special administration order in relation to that company.
(2)The grounds mentioned in subsection (1) above are, in relation to any company—
(a)that there has been, is or is likely to be such a contravention by the company of any principal duty, not being a contravention in respect of which a notice has been served under subsection (3) of section 19 above, as is serious enough to make it inappropriate for the company to continue to hold its appointment;
(b)that there has been, is or is likely to be such a contravention by the company of the provisions of any enforcement order which—
(i)is not for the time being the subject-matter of proceedings brought by virtue of section 21(1) above; and
(ii)if it is a provisional enforcement order, has been confirmed,
as is serious enough to make it inappropriate for the company to continue to hold its appointment;
(c)that the company is or is likely to be unable to pay its debts;
(d)that, in a case in which the Secretary of State has certified that it would be appropriate, but for section 25 below, for him to petition for the winding up of the company under section 440 of the M3Companies Act 1985 (petition by the Secretary of State following inspectors’ report etc.), it would be just and equitable, as mentioned in that section, for the company to be wound up if it did not hold an appointment under Chapter I of this Part; or
(e)that the company is unable or unwilling adequately to participate in arrangements certified by the Secretary of State or the Director to be necessary by reason of, or in connection with, a proposal for the making by virtue of section 7(4)(c) above of any appointment or variation replacing a company as a relevant undertaker.
(3)Notice of any petition under this section for a special administration order shall be given forthwith to such persons and in such manner as may be prescribed by rules made under section 411 of the M4Insolvency Act 1986 (“the 1986 Act”); and no such petition shall be withdrawn except with the leave of the High Court.
(4)Subsections (4) and (5) of section 9 of the 1986 Act (powers on application for administration order) shall apply on the hearing of the petition for a special administration order in relation to any company as they apply on the hearing of a petition for an administration order.
(5)Subsections (1), (2) and (4) of section 10 of the 1986 Act (effect of petition) shall apply in the case of a petition for a special administration order in relation to any company as if—
(a)the reference in subsection (1) to an administration order were a reference to a special administration order;
(b)paragraph (b) of that subsection did require the leave of the court for the taking of any of the steps mentioned in paragraphs (b) and (c) of subsection (2) (appointment of, and exercise of functions by, administrative receiver); and
(c)the reference in paragraph (c) of subsection (1) to proceedings included a reference to any proceedings under or for the purposes of section 18 above.
(6)For the purposes of this section a company is unable to pay its debts if—
(a)it is a limited company which is deemed to be so unable under section 123 of the 1986 Act (definition of inability to pay debts); or
(b)it is an unregistered company which is deemed, by virtue of any of sections 222 to 224 of that Act, to be so unable for the purposes of section 221 of that Act (winding up of unregistered companies).
(7)In this section “principal duty”, in relation to a company, means a requirement imposed on the company by section 37 or 94 below.
On an application made to any court for the winding up of a company which holds an appointment under Chapter I of this Part—
(a)the court shall not make a winding-up order in relation to the company; but
(b)if the court is satisfied that it would be appropriate to make such an order if the company were not a company holding such an appointment, it shall, instead, make a special administration order in relation to the company.