The case of Arlington Infrastructure Ltd (In Administration) v Woolrych [2020] EWHC 3123 (Ch) is a cautionary reminder to qualifying floating charge holders (and their advisors) to review the terms of all security documents, before seeking to appoint an administrator.

In this case, failure by junior chargeholders to obtain consent from senior chargeholders (as required under a deed of priority) prior to the appointment of administrators led to the court finding that the out of court appointment of administrators was invalid (as opposed to being a procedural irregularity that could be cured).

The facts of this case are different to those cases where a deed of priority is in place between two chargeholders with qualifying floating charges over the same company, but the key takeaway applies to all cases where a qualifying floating charge holder is seeking to make an appointment – check all security documents to ensure that the charge is enforceable before making an appointment.  Failure to do so may result in an invalid appointment.