Judge refuses to expedite administration of Toys R Us property owning vehicle

Following the Toys R Us administration at the start of 2018, secured creditors, through a new debt servicer, appointed a receiver over shares in the Toys R Us property owning vehicle who duly sold them.

Subsequently, the new debt servicer entered into disputed standstill arrangements and the lender claimants issued proceedings against the debt servicer, the borrowers and the receivers and also issued an application for the appointment of administrators.

The application before the Judge was to amend the administration application to introduce a further ground challenging the validity of the standstill in an effort to strengthen the administration application, which the claimants were looking to have heard in May 2019 (the hearing was in February 2019) as opposed to at the trial, which was due to be heard in 2020.

The Judge refused to amend the administration application as requested and refused to make an administration order based on the application as it stood as it was not clear, in light if the disputed standstill, whether the amounts claimed by the claimants were then due and owing (they being contingent).

The Judge was also not convinced that the administration purpose could be achieved in any event and felt that the administration application could only be considered once the dispute between the parties had been resolved at the trial of the main proceedings.

Notwithstanding the complexity of the matter and the substantial sums involved, the Judge was not prepared to depart from the principle that an administration order should only be granted in respect of a debt that was due and where the administration purpose can be achieved.

Debussy DTC and others v Solutus Advisors Limited and others [2019] EWHC 1035 (Ch)