The proper route to possession in administration

Nichola Evans, Partner

When a business enters administration, getting the legal process wrong can be costly and securing control of a company isn’t always straightforward. Below we discuss what businesses and insolvency professionals need to know about the correct route to obtaining possession and why choosing the right procedure matters.

The recent High Court decision in Maher -v- Investalet Ltd [2025] EWHC 3133 (CH) has provided additional clarity on the scope of administrators’ powers when trying to recover possession.

Facts

• The administrators of Pocket Renting Limited made an application under s.234 of the Insolvency Act 1986 (IA86) for vacant possession of five properties it owned.
• Prior to administration, the properties had been let to Investalet. Investalet had then sub-let the properties to a third party without the administrators’ consent.
• The administrators terminated the tenancy agreements and sought vacant possession of the properties, but Investalet did not comply.
• The administrators argued that since the tenancy agreements had been terminated, the occupiers were trespassers and therefore they sought vacant possession under s.234 of IA86.

What does s.234 of IA86 do?

• S.234 provides insolvency office holders with a statutory power to obtain a court order to recover the insolvent company’s property, books, papers or records to which the company is entitled

What was the issue for the Court?

• The Court needed to determine the scope of s.234 allowed for an order for vacant possession to be made against trespassers.

Decision

• The Court decided that s.234 is not a catch all enforcement tool. It does not create new property rights for the administrators to bypass the established possession procedures.
• Instead, the administrators would need to apply under Part 55 of the Civil Procedure Rules which is the standard court procedure for recovery property from trespassers.

Why is this important?

• Although s.234 is powerful, it shows that its scope is limited. It is not a procedural shortcut for evicting occupiers.
• Where possession is disputed, the traditional litigation route remains the correct option to purse.

At Kuits, our dispute resolution team regularly advise businesses and insolvency practitioners approaching administration and those facing possession disputes. If you are seeking advice in this regard, please do not hesitate to contact our team on 0161 832 3434 to discuss how best we can support you.

Contributors: Reuben Nesarajah, Trainee Solicitor