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  • Administrations

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    Placing a company into Administration provides a period of protection from its Creditors allowing an Administrator time to manage the business in an orderly and effective manner, in an attempt to achieve one of the following three objectives:

    • Rescuing the Company as a going concern, or
    • Achieving a better result for the Company’s creditors as a whole than would be likely if the Company were wound up (without first being in administration), or
    • Realising property in order to make a distribution to one or more secured or preferential creditors.

    The process to place a company into Administration varies dependent on a number of factors. The major factors effecting the method of appointment are the appointer, whether there are any charges registered against the Company and the extent of creditor pressure.

    Key facts:

    • Following the introduction of the Enterprise Act 2002, the Administration procedure has been a more widely utilised recovery procedure.
    • This process can be instigated by any of the following (subject to certain preconditions); the Director(s), the Company, a Qualifying Floating Chargeholder, the Supervisor of a Company Voluntary Arrangement (“CVA”) or a Creditor.
    • Administrations are processed through the Courts, although some appointments may be made out of Court.
    • The effect of the appointment of an Administrator is to provide an immediate moratorium which lasts for a period of twelve months (although this may be extended).  The moratorium amongst other things;
      • Protects the Company from any legal action being instituted or continued.
      • Dismisses any existing winding-up petition.
      • Prevents the landlord from effecting peaceful re-entry.
      • Prevents the repossession of any HP goods.
      • Appointment of an Administrator can, dependent on circumstances, be virtually instant.
      • Once the Company is in Administration, responsibility over the Company’s assets and liabilities transfers to the appointed Administrator.
      • The Administrator may choose to trade the Company to rescue it or effect a more beneficial sale thereof.
      • The Directors can remain in office (although they could also be removed), but their responsibilities would be clearly defined by the appointed Administrator.

    How we can help:

    • We will arrange a free initial consultation with the instructing party.
    • Evaluate the Company’s financial position, provide details of all options available and make bespoke recommendations.
    • Explain the process in detail and the various options surrounding the appointment.
    • Answer any questions and concerns.
    • Assist in the preparation of all appointment documents.
    • Recommend and liaise with legal advisers and agents where necessary.