In the Matter of Glee Hotel Limited (In Administration) and in the Matter of the Insolvency Act, 2015
The bottom line
#Once a company is in administration, the appointed Administrator has exclusive control, and directors must cooperate fully.
What this practically means
#Executive summary
#Key legal issues
#Validity of the extra-judicial appointment of the Administrator
The appointment was lawfully and validly made in accordance with Part VIII of the Insolvency Act
The Bank demonstrated it held qualifying floating charges, enforceable at the material time, and lodged the section 537 notification, statutory declaration and statement of facts. Omissions of particulars of related proceedings or specific defaults did not go to substance; the notification is not a fully particularized pleading. Prior notice under section 535(1) is owed only to prior chargeholders, not the company.
Proportionality of administration where the Bank holds alternative security
Proportionality argument rejected; the debenture made administration a cumulative remedy exercisable at the Bank's sole election
Clause 18 of the debentures expressly permitted appointment of an administrator 'without prejudice to any other remedies provided by law'. The court declined to import a condition precedent the parties did not impose, and held that holding other security does not automatically make administration disproportionate.
Removal of the Administrator under section 604
Application for removal failed; the Company did not discharge its burden
The Jinnah affidavit was an untested assertion by a stranger to separate proceedings; the Winding Up Cause No. 22 of 2006 remained pending with no conclusive findings. The Administrator showed genuine progress toward rescue (occupancy rising from 7.51% to 24.41%). Even personal culpability would warrant removal and reappointment, not discharge from administration.
Entitlement of the Administrator to protection orders
Granted on a balance of probabilities
Directors transferred Kshs. 23,071,562/- without consent, preferring an unverified unsecured creditor over secured and preferential creditors, in derogation of the moratorium; they denied the Administrator access to accounts and IT systems and failed to furnish a statement of affairs despite demand and expiry of the statutory period under sections 564, 565 and 581.
Legal principles established
#- Section 522 establishes a hierarchy of administration objectives with rescue as paramount and asset realization as last resort
- The notice under section 535(1) is owed only to holders of prior qualifying floating charges, not to the company itself
- A high threshold applies to judicial interference in administration/receivership
- Once administration commences, management functions vest exclusively in the Administrator and directors exercising them without consent commit an offence
Court orders
#- 1.The Notice of Motion dated 6th July 2026 is allowed, with costs to the Administrator
- 2.The Notice of Motion dated 7th July 2026 is dismissed, with costs
- 3.The Notice of Motion dated 13th July 2026 is dismissed, with costs
- Jurisdiction invoked
- Supervisory jurisdiction over administration under Part VIII of the Insolvency Act, 2015, including sections 592 and 604
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "In the Matter of Glee Hotel Limited (In Administration) and in the Matter of the Insolvency Act, 2015", Case Analysis (2026). Not stated in the judgment (Insolvency Cause, Milimani). Source:
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.