This is a procedure which is aimed at rescuing companies by protecting them from their creditors whilst a restructuring plan is developed.
An insolvency practitioner is appointed Administrator and will manage the company’s affairs, business and assets for the benefit of creditors.
An Administrator is appointment by either:
- An order of the Court
- The holder of a floating charge
- By the company or its Directors
The Administrator’s primary goal is to rescue the company as a going concern.
If this is not possible, the secondary objective is aimed at achieving a better result for the company’s creditors than if the company were to be wound up.
If neither of these goals can be obtained, the final aim is to realise the property in order to make a distribution to one or more preferential creditors.
No legal proceedings may be started or continued against a company in Administration except with the consent of the Administrator or the Court.
The procedure to place the company into Administration is by filing documents in Court. If the Court is closed when the appointment is to be made, the documents can be sent to a designated fax.
The Administrators stay in office will last no longer than one year unless the duration is extended.
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