Practice Note: Qualifying Floating Charge Holder – out of court appointments

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The purpose of this note is to explain the court’s approach to the verification process required following the filing of a notice to appoint an out of court administrator by a Qualifying Floating Charge Holder.

Where an appointment is filed out of business hours, the Insolvency (England and Wales) Rules 2016 requires the appointer to “take” the appointment documents to court on the next occasion that the court is open for business: see Rule 3.20(9). Once the documents are received by the court the notice must be sealed and endorsed with the date and time when the notice was e-mailed or faxed or sent to the court. The sanction for failing to do so, or do so within the required time, is automatic cessation of the appointment: see Rule 3.22(2)).

Electronic Practice Direction 510 enables parties to issue proceedings and file documents online 24 hours a day every day all year round, including during out of normal court office opening hours and on weekends and bank holiday with some exceptions such as when the system is down. The Practice Direction expressly excludes the filing of a notice of appointment by a qualifying floating charge holder when the court is closed. The filing must be in accordance with rule 3.20 of the Rules. There is no express provision in the Electronic Practice Direction concerning the verification process required by Rule 3.20(9).

The practice of the Companies Court is that Rule 3.20(9) is satisfied by filing the appointment documents using the CE File. Where the verification process following the filing of a notice to appoint is itself carried out of court hours, it will be deemed satisfied on the next occasion that the court opens for business.

Chief Insolvency and Companies Court Judge Briggs