Company Administration Services

If your company is financially distressed and facing pressure from creditors, the appointment of an administrator can allow time to consider and implement the best solution for the company’s stakeholders.

Our licensed insolvency practitioners frequently act as administrators and typically we would look to explore the merits of:

• Rescuing the company as a going concern
• Having the company continue to trade (if there is sufficient cash available), whilst preparing a sale of all or part of the business; or
• Executing on appointment a sale transaction negotiated in advance – a pre-pack sale – (possibly to the existing management)

There are three entry routes into Administration:

• Appointment by the company or its directors
• Appointment by a qualifying floating charge holder
• By an order of the court

Administrators must perform their functions and purpose with the objective of:

• Rescuing the company as a going concern
• Achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up
• Realising property in order to make a distribution to one or more secured or preferential creditors

Once an administrator has been appointed, creditors are prevented from taking any further action to recover existing debts unless they have the administrators’ or court’s approval. This includes enforcing any security or repossessing goods under hire purchase agreements, a landlord exercising a right of forfeiture by peaceable re-entry or pursuing any other legal proceedings or processes.

The administrator has broad powers and can do whatever is necessary to manage the affairs, business and property of the company. This includes removing and appointing directors and selling property subject to security with court approval. It is common for the company to continue to trade (subject to funding being available) whilst in Administration, to allow the administrator time to negotiate a potential sale of the business and assets. We can assist with the preparation of a short-term trading cash flow forecast and assist with sourcing trading finance if required.

The appropriate exit from Administration within 12 months (unless extended with court approval or otherwise for up to six months with the consent of creditors) will depend on the purpose of the administration and whether the objective has been achieved.

Possible exit routes are:

• To return control of the company to its directors where it can be shown the company is both solvent and viable as a going concern
• To restructure the company’s debts by way of a Company Voluntary Arrangement (CVA), which would allow the company to continue to trade with a longer-term payment plan and return control of the company to its directors
• Move to a Creditors’ Voluntary Liquidation (CVL) or Compulsory Liquidation in order to make a distribution to unsecured creditors
• Move straight to dissolution if there are no remaining funds to distribute

Administration is the key insolvency process for the rescue and survival of a business. Our partners are licensed insolvency practitioners with many years of experience and expertise in dealing with all aspects of administrations.