Force India – recording decisions

Insolvency Practitioners are required to keep records of decisions to sufficiently demonstrate the administration of each matter and any decisions made which materially affect the case pursuant to regulation 13 of The Insolvency Practitioners Regulations 2005 (the IP Regs).

In the Force India case, the claimant sought to argue that the administrators had breached the IP Regs by not keeping sufficient records, in particular by not producing a separate note recording their reasoning in reaching a decision on the bid process. Mr Justice Miles did not consider that there had been a breach and found that in fact the administrators had recorded sufficient information to explain their decision by way of emails, letters and counsel’s opinions. A separate note was not required.

The administrators of Force India successfully defended all claims against them which was no doubt assisted by their ability to evidence decision-making by reference to contemporaneous communications – albeit they elected to waive legal professional privilege to demonstrate the full picture. 

The case serves as a reminder as to the importance of keeping contemporaneous records, both for the purposes of compliance with the IP Regs and as evidence should a dispute arise. The court’s findings are a good indication that the nature of those records can be flexible, which is useful to note particularly where IPs are faced with a fast-moving situation.

For more information about this article, contact Cathryn Butler or another member of our Restructuring & Insolvency team.

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