Administration orders were introduced by the Insolvency Act 1986 as a mechanism to save a company's business. They were changed significantly by the Enterprise Act 2002 to allow easier access to companies in difficulties. A company in administration may continue to trade while a plan is formulated to achieve one of the following purposes:
| i. |
Rescuing a company as a going concern, or |
| ii. |
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 |
| iii. |
Realising property in order to make a distribution to one or more secured or preferential creditors. |
Administration can be sought by the company, its Directors or one of the creditors. A creditor holding a qualifying floating charge can appoint an administrator to realise their security.
For further advice and assistance regarding any aspect of the above insolvency procedure, please contact BRI. We will discuss, free of charge, any further implications and alternatives with you. |
