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Company Administration services

This mechanism is designed to protect a company from its creditors while a restructuring plan is completed. This technique can be a very powerful tool for protection of a company where it has a very aggressive creditor or creditors and needs to protect itself from them whilst a rescue plan can be worked out. It is not the same as an Administrative Receivership.

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What are the key components?

The company must be of a reasonable size, have reasonably predictable cash flows and must be able to predict profitability. There must be an insolvent position or contingently insolvent position and the directors think that a hostile creditor will seriously affect the future trading possibilities. This is often a landlord or the Crown creditors.

The administration process requires a licensed insolvency practitioner (IP) to act as the Administrator appointed by the court. The court appointed Administrator takes over the management of the company and takes responsibility for restructuring the company or business.

If the company has little in the way of assets, poor cash flow and no future then creditors voluntary liquidation is probably more appropriate than Administration.

There are two types of application to the High Court. There is the "without court order" appointment route for holders of qualifying floating charges and companies/directors - this is quick and does not need a court application or hearing. But sometimes it is better to still make the second type of detailed application which asks for a formal Court Hearing.