Business Rescue

Administration

Administration is an option that is available to insolvent limited companies and partnerships. Control of the business passes from the directors to the Administrator and gives the Insolvency Practitioner wide ranging powers to facilitate the rescue of all, or part, of a business, or to simply maximise the recovery for creditors.

We can act as administrators if the underlying business, despite its financial difficulties, remains potentially viable and the procedure is in the best interests of creditors generally. An administrator is an officer of the court and can be appointed by the company’s directors or its shareholders. In some circumstances it is also possible for the Company’s creditors to appoint an administrator.

One purpose of an Administration is to give the company a breathing space from its creditors’ demands and to allow time for us, as Administrators, to review the viability of the business.

When acting as Administrators of a company we have many options to save all, or part, of a business including, but not limited to:

Restructuring the company to facilitate a Creditors’ Voluntary Arrangement (CVA)

If resources permit, continuing to trade the business to preserve its value whilst seeking a purchaser for all, or part, of the business.

Using a Pre-Pack Administration. This is a technique that enables the seamless continuation of a business. It allows for the sale of some, or all, of the insolvent company’s assets to a new, or existing, company. The sale contract is agreed prior to the insolvent company formally going into Administration. The sale of any assets must be at in situ market value but can then take place shortly after the insolvent company enters Administration. This gives the surviving business a stronger chance of retaining goodwill, preserving supplier and customer relations, and retaining employees. Ultimately the outcome for creditors can be beneficial when compared to the alternative of company liquidation.

Directors of the old company may be permitted to be appointed as directors of the new company; it is incumbent on the proposed Administrator to make the process as transparent as possible.

As Administrators we will put forward a proposal to save as much of the business as possible, having consideration for the interests of all stakeholders.

company moratorium

Recently paased legislation now gives struggling companies a 20 business day opportunity to consider a rescue plan. This timeframe can be extended for a further 20 business days, or with the consent of creditors, the extension can be for up to a year.

The process must be monitored by a licensed Insolvency Practitioner, but the company remains under the control of its directors.

The Moratorium prevents any action against the company without leave of the court.