Administration is a useful procedure for companies which appear to be viable (at least in part) as a going concern.

It is used as a rescue tool for insolvent businesses, allowing continued trading with a view to the sale of the business and/or its assets as well as potentially saving jobs.

Entering into administration can be done very quickly. The appointment of an administrator can be made by the Court, a qualifying floating chargeholder, the directors, the company or by one or more creditors.

The administration procedure usually lasts for a maximum of 12 months and is followed by an exit strategy (usually liquidation, dissolution or a voluntary arrangement).

A company may enter into administration with the aim of:

1. rescuing the company as a going concern; or
2. 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
3. realising property in order to make a distribution to one or more secured or preferential creditors.

A company in administration is automatically protected from creditors commencing or continuing legal action against it, known as a moratorium.

A ‘pre-pack’ administration is where a purchaser is found for the business and/or its assets prior to the administration an effected immediately upon, or shortly after, the appointment of an administrator.

Valentine & Co will advise you on the administration procedure and the effects on the company, its creditors and the directors.

Call us now on 020 8343 3710 to discuss your options.