The Business Debt Advisor

Administration - Explained

 
This procedure is designed to protect companies from their creditors while a restructuring plan is developed. The type of creditor action that administration will stop includes:-

•  Bailiffs distraining on behalf of rating authorities

•  Landlords distraint for arrears of rent

•  Action by Revenue and Customs & Excise to enforce their debt

Following changes to legislation introduced in September 2003, the administration procedure is now streamlined which has resulted in reduced costs and better returns to creditors. An Administrator can be appointed by filing documents at court and with a few exceptions, the administration must be concluded within a year.

The purpose of the administration must achieve;

1) Rescue of the company as a going concern or if that is not possible

2) Achieving a better realisation of the company's assets than in a liquidation

Only if the neither of the first two purpose are possible, can the administrator use the third purpose:-

3) Realising property in order to make a payment to the company's secured or preferential creditors.

 

The Next Step

The options for a financially distressed business need to be very carefully considered. Simply forward your details on our Contact Form and we will contact you. Alternatively ring us on our FREE ADVICE LINE 0800 781 0990.