[2025] EWHC 2887 (Ch)

Condition 2 looks at the purpose of the administration. The Company does not seek to rely upon the first purpose because it recognises that its business cannot be continued as a whole as a going concern, following the termination of the key contract by TenneT. Rather, it focuses on the second condition, namely, asking whether it is “reasonably likely” that an administration would achieve a better outcome for creditors as a whole than would be likely if it were wound up (without first going into administration).

In deciding whether the “reasonably likely” threshold is met, I apply the approach of Warren J at [3] of Auto Management Services Ltd v Oracle Fleet UK Ltd [2007] EWHC 392:

“There has to be a real prospect that the administration order will achieve the purpose. This does not mean that I need to be satisfied that, on a balance of probabilities, there will be a better outcome on administration as compared with winding up. There has to be only a real prospect. It is not enough to show a real prospect that administration would achieve no worse an outcome. The prospect of a better result must be shown. However, I venture to think if an administration can be shown in all but the most unlikely circumstances to produce a result no worse than liquidation and if it can be shown there are reasonably possible circumstances in which administration can, in fact, produce a better result, so that paragraph 11(b) is satisfied, that will be a significant factor when it comes to exercising the discretion whether or not to make an order.”

There is clear force in the general proposition that an administrator has more and better tools in his toolbox than a liquidator because the business of a company can straightforwardly continue in an administration, but it cannot in a liquidation. Therefore, an administration would enable the Company’s businesses, or parts thereof, to be sold relatively simply if buyers can be found.

In this case, the Company is not just relying on that general statement. It points to the fact that the administrators have already been closely involved in attempts to sell parts of the Company’s business, as part of the process that I described when giving the background to the application for administration. Shortly put, the proposed administrators know the Company’s business and have been involved since August 2025 in attempts to sell parts of it.

Of course, the termination of the TenneT contracts has altered the landscape, but the evidence suggests that there are parts of the business that are viable despite that termination. Following an administration order, the administrators will, no doubt, need to go back to those people with whom the Company did not proceed with in an early attempt to sell the business. There is also the prospect that an administration order will cause other people to emerge as potentially interested in purchasing viable parts of the Company’s business.

Mr Reis e Sousa’s evidence satisfies me that a sale of part of the Company’s business remains viable despite TenneT’s termination of contracts. I am satisfied that it is “reasonably likely” that the second condition will be satisfied. I am reassured to note that the proposed administrators have confirmed, in their consents to act, that they share this view.