In the wake of the Pindar and Toogood cases last year the question of whether a paid secured creditor is a creditor for the purposes of decisions such an administration extension or fee approval (and beyond) has continued to be a topic of discussion amongst professionals - given the Insolvency Service’s longstanding view that creditors are classed as such at the point of entry into an insolvency process.
With some since taking the view that creditors do not need to engage in a decision once they have been paid, and others remaining cautious and seeking their consent in any event.
Thankfully, the Insolvency Service has provided some clarity to practitioners, having confirmed they have reframed their view of “creditor” and that a “creditor” is no longer fixed at the date of entry into a process but is context specific. This will be confirmed in a Dear IP shortly. But in the meantime, see our Insight that provides further commentary on the impact of this.
