Directors appointing administrators under paragraph 22(2), Schedule B1, Insolvency Act 1986 must give notice of intention to appoint to the company (pursuant to paragraph 26(2), Schedule B1, Insolvency Act 1986 and Rule 2.20(2)(d), Insolvency Rules 1986).

The "record of the decision of the directors" to make the appointment required by Rule 2.22 must be of a valid board resolution in compliance with the requirements of the company's articles at a meeting properly convened with notice.

So found Sir Andrew Morritt (Chancellor) in Minmar (929) Ltd & Teejinder Paul Chohan v Freddy Khalatschi & Martin John [2011] EWHC 1159(Ch), holding the appointment of administrators in that case invalid.

I am grateful to Lawrence Graham for drawing this decision to my attention.

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Stitching up creditors; insolvency practitioners earning huge fees; rescuing businesses; clearing up a mess: these are examples of what insolvency means to people.

You may have thoughts of your own (please comment below), but some of my observations are:

• Directors or debtors don’t usually cause loss to creditors on purpose, although creditors often lose and directors/debtors can certainly be at fault.
• Insolvency practitioners are highly trained, qualified, skilled and regulated specialists, who are paid the same as other specialist accountants and lawyers. Their fees are approved by creditors.
• Most troubled businesses can be rescued if good advice and remedial action are taken soon enough. If left too late, that remedy may involve insolvency proceedings where creditors are not paid in full.
• There are always losers in a formal insolvency, which is why action should be taken early enough to avoid it. When that doesn’t happen, problems turn into a mess and people lose – sometimes a lot.

The theme is that whether you’re a creditor or a debtor it pays to seek advice early – from someone who really knows what they’re talking about.

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