The pragmatic approach to insolvency (Re Lehman Brothers Europe Ltd (in administration))

Table of contents

• Original news
• What approach did the administrators take towards distributions to members?
• The key issue
• The proposed solution
• The decision
• Should a director of a company in administration be permitted to make a distribution to members?
• Did the proposal have to be consistent with and further the purposes of the administration?
• Were the administrators restricted by the proposals which they had published at the outset?
• Was there a statutory trust over assets in a distributing administration and if so did that affect the proposal?
• How did the case conclude?

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Article summary

Restructuring & Insolvency analysis: Joe Bannister, John Tillman and Margaret Kemp of Hogan Lovells examine the Lehman Brothers Europe Limited (LBEL) case and suggest the decision illustrates the courts are willing to adopt a pragmatic approach in assisting insolvency practitioners who need to act quickly in circumstances where their proposed actions are not expressly addressed in the Insolvency Act 1986 (IA 1986).