The GoodBox Administration - The Judgement

So, we have had the Court case, I have received the reports of those who attended on my behalf, read the reports of those who attended independently and finally, yesterday morning, I get the chance to read the actual judgement.    

Two things are missing from the various reports:

1. Patrick and I took a neutral stance on the application.

2. The Application requires an alternative to be provided.

In terms of point 1, if it succeeds, the Part 26a scheme offers a 100% return for all creditors (including Administration creditors) except for convertible loan note holders who claims incidentally increased due to penalties in the Administration.  The loan note holders receive considerably less as part of the Scheme and nothing in an Administration sale (see 2).  

As drafted, the scheme was also very beneficial to the applicant and was very light on detail in several areas, so much so that Patrick and I could not see how, on an ethical basis, our carriage of the matter could continue.    

In terms of point 2, the application requires an alternative to be provided which was a sale of the business and then a wrap up before finalising an investigation in a Compulsory Liquidation. Patrick and I had a clear understanding of the path to be followed but struggled understandably to provide the certainty necessary for a Court application.  What was clear was that the non-trading creditors were comfortable with that uncertainty and, if the Part 26a scheme application was not approved, we needed the Court’s guidance on a sale as a result of the Administration Order.      

Please do all enjoy the judgement on a case which, we believe to be an outlier in terms of current practice, but which might assist in smaller cases where there are simply not the funds to do the gold service application that many of our legal brethren aspire too.  Patrick and I both look forward to the GoodBox being the first of a new set of Part 26a schemes of the smaller concerns that the legislature envisaged would benefit from this legislation.  We are of course also very happy to take calls and answer questions.

Click here to read the full judgement.

 

 

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