Chris is an Insolvency Practitioner regulated by the ICAEW since 2014,.
He is experienced in contentious insolvency with excellent analytical skills and strong knowledge of both general and technical insolvency matters.
Understanding the Purpose and Process of Filing a Notice of Intention (NOI) to Appoint Administrators
A Notice of Intention to Appoint Administrators (NOI) is a formal legal document filed under Paragraph 26 of Schedule B1 to the Insolvency Act 1986. It serves as an official declaration of a company’s intent to appoint an administrator when facing insolvency.
Filing an NOI offers several key advantages:
It creates a moratorium, protecting your company from creditor actions for up to 10 business days.
You gain valuable time to assess your options and prepare for administration.
It demonstrates to stakeholders that you’re actively addressing financial challenges.
When you file an NOI, you’re not immediately entering administration. Instead, you’re creating a protected period to make informed decisions about your company’s future. This can be particularly useful if you’re negotiating with potential investors or trying to secure additional funding.
However, it’s important to understand that filing an NOI is a serious step. It becomes public knowledge, which may affect relationships with suppliers and creditors.
A Settled Intention
Crucially, the case of JCAM Commercial Real Estate XV Limited v David Haulage Limited (2017)[1]Trusted Source – ILA – Case: EWCA Civ 267, CA, 11 April 2017 clarified that to validly file an NOI, a company or its directors must have:
A ‘settled and fixed intention’ to appoint an administrator.
A conditional intention (e.g., considering administration as a backup plan) is insufficient and can be considered an abuse of process.
This ruling emphasises that NOIs cannot be used merely as a tactical device to gain breathing space while exploring other options. The intention to appoint an administrator must be genuine and immediate.
How to File an NOI
Filing an NOI involves a specific process that you need to follow carefully.
First, secure a qualified insolvency practitioner who’s agreed to act as the administrator. They’ll need to provide a written statement consenting to act and stating that the purpose of administration is likely to be achieved.
The company (if the application is by the directors)
Floating Charge Holders Right to Object
Qualifying floating charge holders (QFCHs) have the power to object to the appointment of an administrator and, in some instances, may choose to appoint their own administrator. While failure to give proper notice to QFCHs doesn’t automatically void the appointment, (as established in Re Tokenhouse VB Limited [2020]), it allows QFCHs to seek court intervention. The court may then exercise discretion to remedy the situation, potentially by appointing administrators of the QFCH’s choosing.
Remember, there are restrictions on appointing an administrator, such as within 12 months of a previous administration or if a winding-up petition is pending. The court has the power to intervene if there are concerns about the NOI’s validity or use.
What Happens After You File?
Once you’ve filed your NOI, a moratorium period begins. This means:
Creditors cannot take legal action against your company without court permission, for 10 business days from the filing date.
You’re protected from winding up petitions, and existing procedures are paused.
Landlords cannot forfeit leases without court approval.
If you decide to proceed with administration, you must appoint the administrator within the 10-day period. If not, the NOI will expire, and the protections will cease. An extension of 10 days may be given if there is an impending agreement and the court deems it beneficial for creditors.
References
The primary sources for this article are listed below, including the relevant laws and Acts which provide their legal basis.
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