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US company goes into English administration

United Kingdom
15/01/2003
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In a decision yesterday afternoon, the High Court has held that a company registered in Delaware in the United States can be placed into administration in England and Wales pursuant to the terms of the Insolvency Act 1986 and the European Regulation on Insolvency. This is the first time that a company registered in a country outside the European Community has been placed into administration by an English court.

The company in question, Brac Rent-A-Car International Inc (formerly Budget Rent-A-Car International Inc), was part of the Budget Group of Companies that filed for Chapter 11 in the United States in July 2002. Although it is registered in Delaware, the company's headquarters are in Hemel Hempstead and the company's operations are based in the United Kingdom. In finding that the company's centre of main interest ( "COMI" ) was in England and that the European Regulation on Insolvency would therefore apply to the US-registered company, Lloyd J emphasised that a purposive approach should be taken to the interpretation of European Community legislation.

Lloyd J is preparing a written judgment and a more detailed analysis of this decision will be published on Law-Now when it becomes available.

For further information, please contact Duncan Aldred at [email protected] or on +44 (0)20 7367 2709 or Ed Husband at [email protected] or on +44 (0)20 7367 3577.

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