when we are trying to get the necessary data to complete an administration and the holder of the data responds with a message like:

‘Further to your note on access to emails and server, xxx Group has historically operated within a group-wide, centralised IT and email infrastructure, without standalone subsidiary systems for xxx London. ‘

What should we be explaining to them? Are they entitled to just block because they did not segregate their data? What are their responsibilities for segregating data in this instance? they are a US group with a UK subsidiary that has been taken into administration and we have been enagaged top recover the data.

When you receive a response like “xxx Group has historically operated within a group-wide, centralised IT and email infrastructure, without standalone subsidiary systems for xxx London,” you need to explain the following to them:

1. The Legal Basis for Data Access:

• Clearly state the legal basis under which you, as administrators of xxx London, require access to the data. This will likely stem from the insolvency legislation in the UK (e.g., the insolvency Act 1986 and related rules). Explain that as administrators, you have a statutory duty to take control of the company’s assets, which includes its data, to facilitate the administration process (e.g., asset sales, investigations into the company’s affairs, and potential distributions to creditors).
• Reference any specific court orders or appointments that grant you the authority to access the company’s records and data.

2. The Scope of Data Required:

• Clearly articulate the specific categories of data you need and why they are essential for the administration process. Avoid broad or vague requests. Examples include:
  • Financial records
  • Customer data
  • Supplier information
  • Employee records
  • Operational data relevant to ongoing contracts or potential sales of the business or assets.
  • Emails and server data relevant to the business operations of xxx London.
• Explain how this data will be used to achieve the objectives of the administration.

3. The Implications of Not Providing Access:

• Explain the potential negative consequences for the administration process if access is denied or unduly delayed. This could include:
  • Hindering the ability to identify and realize assets.
  • Impeding investigations into the company’s affairs.
  • Delaying or preventing distributions to creditors.
  • Potentially leading to legal action to compel access.

4. Their Responsibilities as Part of the Group:

• While Manifest Group might have a centralised IT infrastructure, they still have a responsibility to cooperate with the administrators of their UK subsidiary. Explain that:
  • The insolvency of xxx London creates a distinct legal entity with its own data requirements.
  • As the parent company, they likely hold the technical means to provide access to the relevant data pertaining to xxx London, even within the centralised system.
  • There is an expectation of cooperation in insolvency proceedings to facilitate the orderly winding up of the company’s affairs.

5. Data Segregation (Even if Not Historically Practiced):

• Acknowledge their statement about the lack of historical segregation. However, explain that:
  • While they may not have had separate systems, they likely have the ability to filter, extract, or provide access to the data specifically related to xxx London within their centralised system.
  • You are seeking their cooperation in identifying and providing this specific subset of data.
  • The lack of prior segregation does not absolve them of the responsibility to provide the necessary data for the administration of their UK subsidiary.

Addressing the Question of Blocking:

• No, they are generally not entitled to simply block access to data solely because they did not segregate their data. The lack of segregation is an internal operational choice and does not override the legal obligations arising from the insolvency of their UK subsidiary.
• While they might face technical challenges in isolating the data, they have a responsibility to make reasonable efforts to provide it. A complete refusal to provide any data would likely be viewed unfavourably by the UK courts and could lead to legal action to compel access.

Their Responsibilities for Segregating Data in This Instance:

• Historically, there might not have been a specific legal obligation under UK law for a parent company to maintain segregated IT systems for its subsidiaries. However, the situation changes significantly upon the subsidiary entering administration.
• Now, their responsibility is to cooperate with the administrators to provide access to the data relevant to Manifest London. This includes using their technical capabilities to identify, extract, and provide that data, even if it resides within a centralised system.
• While they might argue about the cost and effort involved, they cannot simply use the lack of prior segregation as a justification for non-compliance. The needs of the administration and the rights of creditors take precedence.
• It’s important to emphasize that the administrators are not asking them to create segregated systems retrospectively. The focus is on accessing the data that already exists within their current infrastructure and pertains to xxx London.

In summary, your communication should be firm but professional, clearly outlining the legal basis for your request, the specific data needed, the consequences of non-compliance, and their responsibilities to cooperate in providing access to the data of their insolvent UK subsidiary, regardless of their historical IT infrastructure choices. You may need to escalate the matter legally if they continue to refuse or unduly delay access.