Boughey & Field vs Toogood International Transport and Agricultural Services Ltd

This case concerned an application by the administrators of Toogood International Transport and Agricultural Services Ltd for an extension of the administration period.

TLDR:

• Administrators sought an extension of their term until June 2026.
• Application involved clarifying the need for consent from secured creditors who had been paid in full.
• The court granted the extension, emphasizing the importance of creditors with an economic interest.

The company, Toogood International Transport and Agricultural Services Ltd, faced financial difficulties following Brexit and the Covid-19 pandemic. Unable to pay its debts, the company entered administration in June 2022. The administrators sought to extend their term to continue asset realizations and distributions to creditors.

Key issues included whether consent from secured creditors who had been paid in full was necessary for extending the administration. The court examined the statutory definitions and relevant case law, concluding that only creditors with an economic interest needed to consent.

The court reviewed the administrators' progress, noting significant asset realizations and ongoing investigations into directors' loan accounts. The administrators argued that further time was needed to maximize returns for creditors.

The court found that the administrators had acted appropriately and that the extension was justified. The decision clarified that creditors who had been paid in full were no longer 'secured creditors' for the purposes of administration decisions.

The court ordered the administration to be extended until June 2026, allowing the administrators to complete their work and distribute assets to creditors.

Legal representatives: Osborne Clarke for the Applicants

Judicial Panel: HHJ Paul Matthews (sitting as a Judge of the High Court)

Case Citation Reference: [2024] EWHC 1425 (Ch)