Corporate Restructuring News: What happens now?
Administration can help an insolvent company to be rescued as a going concern or facilitate a sale of its business and assets, while offering protection from creditor action.
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:
There are three entry routes into Administration:
Administrators must perform their functions and purpose with the objective of:
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:
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.
We provide practical, business focused advice to help you achieve your business objectives. Our team of experts are available at any one of our four office locations and have an extensive knowledge and experience across a wide range of sectors.
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