Administrative Receiverships - Explained

Administrative Receivership is a procedure that can only be instigated by a secured creditor with a valid floating charge over the assets of the company. This is usually the company's bank.

The charge must have been created prior to 15 September 2003. With a few exceptions, secured creditors with charges created after 15 September 2003 are no longer able to appoint an Administrative Receiver. Administration is viewed as an alternative action.

An Administrative Receiver's role is to achieve the best outcome for the appointing chargeholder.


The company is insolvent but there is a strong chance that the business can be sold on and there is a floating charge creditor with the power to appoint an Administrative Receiver.

It appears to the floating charge holder that there is a risk the assets covered by its charge are likely to be diminished by continuing trading.


The Next Step

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