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Max Lowry
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Category: UK Bankruptcy Law
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Experience:  LLB, 10 years post qualification experience
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Hi, I was a director of a company that went into administration

Resolved Question:

Hi,

I was a director of a company that went into administration in Sept 2012. It has just come to light that two CCJ's were registered against the company in Oct 2012 totalling £5k.

The Administrator says that they were not aware of these claims and neither were we as directors prior to going to administration. Two questions;

Do we have any recourse against the Administrator for not dealing with them?

Can we get the CCJ's removed?

Thanks in advance.
Submitted: 1 year ago.
Category: UK Bankruptcy Law
Expert:  Max Lowry replied 1 year ago.
Hi, welcome to Just Answer. I will help you with your question. If the administrator was not aware of the claims ( and neither were you) there does not appear anything that he could have done to stop the creditors obtaining judgment. One of the main advantages of administration is the moratorium - this prevents anybody taking action against the company.

In your case, it seems the claims had already been issued just prior to administration and the creditors obtained judgment in default after administration. Essentially, when the company entered into administration or when the notice of intention to appoint an administrator was filed ( whichever came first) the moratorium commences.

The administrator can ask the Court to apply to set aside the judgments on the basis the company was already in administration. I suspect this will simply be a rubber stamping exercise by the Courts. Alternatively, you could just ignore the judgments themselves on the basis they cannot be enforced whilst the company is in administration. Unless you are looking to trade the same company after administration (I.e. the company returns to the directors after administration) the judgments and debts should stay with the company.

In any event you should inform the administrator that the debts are disputed and should be ignored when he comes to consider making a distribution.

Whether the judgments stay or not the creditors will remain unsecured and will rank together with all other unsecured creditors.
Customer: replied 1 year ago.

Max


 


Thanks for your response. Your answer is what I have found on the internet. To complete the answer, I guess you tell me if the Administrator has failed in their duties? I need to find the angle to get them to deal with this matter.


 


The issue has arisen after trying to obtain a personal mortgage and the mortgage company running a directors search and finding the CCJ's. That was the first we heard about it.


 


Thanks


Russell Lerman

Expert:  Max Lowry replied 1 year ago.
Hiya, it is very unlikely the administrator knew about the claim and by the time judgment was entered it was too late. The administrator would rely on the directors of the company for information regarding its creditors or any claims/winding up petitions in progress. The only check that an administrator needs to do is to ensure there is no winding up petition against the company - and this step is discretionary. He has no other duty to ensure nobody obtains judgment against the company. If he has not done so already he should have written to the claimants and advised them that their judgments are defective as the courts were not aware of the administration.

I cannot see that the administrator can be responsible for this, I'm afraid. The difficulty for the two claimants who have judgment is that their respective judgments are, in reality, defective as the company was already in administration when judgment in default was obtained.

When you ask the administrator to write to the claimants it may be worth copying the court in too. The letter will however only stay in the court file and the judgment will remain unless an application is made to set them aside.

You mention that the CCJ's have shown up when the bank did a credit search. This sounds like the CCJ may not have been just against the company. Could it be related to some personal guarantee? The bank would not be/should not be concerned about a CCJ against a limited company- it is a separate legal entity. If the CCJ has anything to do with you personally the administrator would probably refuse to get involved. You could however ask him the question.
Max Lowry, Advocate
Satisfied Customers: 1392
Experience: LLB, 10 years post qualification experience
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Customer: replied 1 year ago.

Thanks you for advice.


 


In summary, we don't have a leg to stand on and we are relying on the Administrators good nature to write the court on our behalf.


 


The CCJ's are definitely against the company and not us personally as we have run personal credit checks. The lender, Halifax, hold CCJ's against you if were a director of a company that had a CCJ lodged against it. This underwriting policy seems to contradict the point of setting up a Limited company.


 


Kind regards


 


 

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