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Administration

An Administration was originally a Court based mechanism for protecting companies while a rescue was planned. Since 2002 getting into Administration is easier and, under certain circumstances, can be done without the need for a Court hearing. Administration orders can be obtained by the company, its directors or one of its creditors.

There are only three purposes for an administration and these are:

Rescuing the company as a going concern, or
Achieving a better result for the company's creditors as a whole than would be likely if the company were wound up (without first being in administration), or
Realising property in order to make a distribution to one or more secured or preferential creditors.

Perhaps the company could be saved by restructuring its operations or finances or both but the pressure from creditors (including the bank or HM Revenue & Customs), landlord or suppliers is so acute that there is no time to do so. An administration may allow the company to continue to trade while a rescue plan, which may involve the approval of a Company Voluntary Arrangement, is put together. However, the earlier we get involved the better so please contact us as soon as possible to discuss all available options.

Benefits of an Administration include:

trading continuing with protection from creditors whilst a solution is found;
the possibility of a speedy implementation of the administration;
the opportunity to safeguard or realise assets which would be lost in liquidation.

Frequently Asked Questions:

How is the company put into Administration?	Usually, in the absence of a winding-up petition, it is a matter of filing the appropriate documents at Court having agreed the choice of administrator with the floating charge holder.
How long will it take to put it in place?	It depends on the complexity of each case but, if necessary, it can be done in 24 hours.
What happens to secured creditors like the bank?	Secured creditors must be consulted and we would expect to contact the bank as part of the process. A floating charge holder has the opportunity to appoint an administrator and can veto your choice of administrator.
Can directors buy assets back from the administrator?	It is perfectly possible to do so but it must be done in a in a legal, fair and transparent way and the price paid must reflect the true value.
How long will it last?	Generally no longer than a year but under certain circumstances it can be extended to 15 months.
Who will run the company?	Usually the company will be run by the Directors under the supervision and control of the Administrator.
What will it cost?	Each case is priced on its own merits and reflects its complexity and the amount of time required. We will be happy to give an indication of cost once we understand the intricacies of the case.
What if we have not got any cash?	We have come across this problem before! We may still be able to help by structuring the costs differently but, in any event, our first consultation is free so please contact us to discuss how we might help.

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