Administration

Administration can be used to rescue a company having financial problems as a going concern; to achieve a better result for the creditors of the company as a whole than would be achieved in an immediate winding up or, if neither are possible, to realise the company assets for the benefit of the secured or preferential creditors.

This process starts with the appointment of an administrator. The administrator may be appointed by court order, by the holder of a floating charge or the company directors filing the requisite notice at court. The administrator puts forward proposals for consideration by the creditors to either restore the company's viability, to come to an arrangement with the creditors, to sell the business as a going concern or to realise more from the assets than in a liquidation, or realise assets to pay a preferential or secured creditor.

Administrative receivership is the result of a holder of a floating charge (usually a bank) appointing an administrative receiver to recover money owed to it. The court is not usually involved. A company in administrative receivership is also said to be 'in receivership'. The administrative receiver's task is to recover enough money to pay:

(i) his/her costs,
(ii) the preferential creditors and
(iii) the floating charge holder's debt.

An administrative receiver does not make payments to unsecured creditors.

Further Information

> Guide to Administration
> Administration Frequently Asked Questions

Contact Us

Call now on 0800 731 2466 to speak to one of our experienced advisers.