Matthew Moriarty Successful in Re Hunt and another (in their capacity as joint administrators of Cross Transport Ltd) [2026] EWHC 1636 (Ch)

Matthew Moriarty acted for the successful applicants in Re Hunt and another (in their capacity as joint administrators of Cross Transport Ltd) [2026] EWHC 1636 (Ch).

The applicants were the administrators of Cross Transport Ltd, a company in administration that had previously been in a moratorium pursuant to section A3 Insolvency Act 1986.

Pursuant to paragraph 64A of Schedule B1 Insolvency Act 1986, as the Company had been in a moratorium immediately prior to administration, certain moratorium creditors were granted a super priority above payment of administration remuneration and expenses under paragraph 99 of Schedule B1.

The administrators had identified potentially valuable litigation claims in the administration, but the significant sum of moratorium debts meant that, even if the litigation claims were successful, the moratorium debts risked exhausting any recoveries, so that even a successful outcome might not leave sufficient funds to meet litigation expenses or the return under the funding agreement.

The administrators applied for directions that they could pay the litigation expenses, including payments under the funding agreement, ahead of the super priority, on the basis that, absent such a direction, the litigation could not be pursued and valuable claims would go unrealised.

The Court held that paragraph 64A gives protected moratorium creditors a super-priority, but it does not bar administrators from paying administration costs and liabilities prior to payment of moratorium debts, where to do so is in pursuit of the purpose of the administration and in accordance with the administrators’ functions, and paragraph 64A must be construed in a manner which supports the purpose of the administration.