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James Morgan QC acts for administrators in defeating removal application

In Re TPS Investments Ltd [2018] EWHC 360 (Ch), administrators had been appointed as office-holders of three connected companies. A creditor applied to remove the administrators as office-holders of one of the companies on the basis that it had a potential TUV claim against one of the others and the administrators were in a position of actual conflict in dealing with the claim from both sides. However, HHJ Stephen Davies (sitting as a judge of the High Court) accepted James’ submissions that (1) the existence of an actual conflict of interest was not an absolute bar to the administrators continuing to be appointed and (2) in the instant case the conflict could be managed by a range of possible options. In so holding, the Judge held that the contrary suggestion in a leading textbook on conflicts was not consistent with authority, in particular the observations of Warren J in SISU Capital Fund v Tucker [2006] BCC 463. 

This case underlines the point that the court may, in the interests of creditors, adopt a more generous attitude to conflicts of interest in the case of office-holders holding multiple appointments over connected companies than in relation to fiduciaries more generally. That is because such appointments are likely to save costs, professional office-holders are well used to dealing with conflicts and there are ready mechanisms for applying to court for directions as required. 

The Judgement can be found here.

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