The Administration process is primarily a method to rescue a company in financial difficulty. It is a powerful remedy which provides a moratorium to protect a business whose survival is threatened by pressure from suppliers, landlords and the tax authorities. Creditors can be kept at bay while a survival route to financial rehabilitation is established, and the future of the company or its business assured.
Because of the wide-ranging scope of the Administration moratorium, only an Insolvency Practitioner (IP) has the legal authority to act as the Administrator of the company. Turnaround professionals and other advisers may be involved in devising restructuring and re-organisation plans but the role of the IP as Administrator is paramount.
The IP must establish that the company falls into the following criteria, in the following sequence of priority:

  1. Can the company be rescued as a going concern?
  2. Can the administrator achieve a better result for the creditors than a winding-up of the company?
  3. Can the administrator realize property to make a distribution to secured and preferential creditors?

The Administration process can be implemented by the company, its directors, or by any creditor who holds a “qualifying floating charge” over the company.

The company, or its directors can nominate the IP that they wish to be appointed to act as the administrator of the company, however if a creditor holds a qualifying floating charge, they have the final decision on the appointment.

Whichever route is used the properly appointed Administrator is an officer of the Court and will act accordingly in the interests of the relevant stakeholder groups.

We at Guardian Business Recovery will advise on benefits or drawbacks of the Administration process to your company and prepare all the necessary paperwork.

We work with the directors, shareholders and any qualifying floating charge holder throughout the Administration process, and have extensive experience in co-operating with turnaround experts, lawyers and bankers to ensure the effective implementation of the chosen rescue package. Where any vital element is lacking, we can call upon the services of an extensive network of expert specialists from all spheres, using contacts built up over many years. We and are available to discuss and deal with any issues.

We can also work with the key members of the company to formulate a rescue or turnaround solution.

An Administration will last for up to a year, although this period may be extended. Depending on the purpose of the Administration, the whole process may only take a few months, and the “pre-packaged” Administration will leave management free to concentrate on the new business from day one.

Typical companies entering into Administration include:

  • Where the company has suffered short term trading issues.
  • Where bad debts have temporarily affected cash flow, but the company is otherwise profitable.
  • Where breathing space from creditor pressure is need by the company during a period of refinancing or restructuring.
  • Where part, or all of the company is being sold and the directors wish to ensure the transparency of the sale.
  • Where a prospective purchaser of the company has been identified but they have concerns about transacting with an insolvent company.

Please call John Paylor on 020 3096 0750 if you are the director or shareholder of a company and would like advice or to discuss any matters raised. Alternatively ask your company’s own professional advisors to contact us to discuss the options available.

GBR Meeting to discuss how we can help you

Contact

Guardian Business Recovery
72 Temple Chambers
Temple Avenue
London, EC4Y 0HP
Tel : 020 3096 0750
Fax : 020 7583 1200

Or complete details on
Contact Us for a call back.
GBR is a member of R3
GBR is Member of ICAEW Chartered Accountants

John Paylor is licensed as an insolvency practitioner in the UK by the Institute of Chartered Accountants in England and Wales

Print Friendly, PDF & Email