6.5 Duties and powers of administrator

Question 1

How long does an administrator have to notify CH of appointment?

Answer 1

7 days

Question 2

How long does an administrator have to notify creditors, gazette and notify co?

Answer 2

ASARP

Question 3

How long does an administrator have to send notice of appointment to other parties?

Answer 3

ASARP

Question 4

If a creditor requests hard copy of a document on a website - how long to provide?

Answer 4

5 days

Question 5

Does the administrator have the power to remove or appoint directors?

Answer 5

Yes

Question 6

How does a secured creditor recover property in an administration?

Answer 6

Secured creditor may apply to administrator for permission to recover property (notwithstanding the moratorium)

 If administrator refuses, creditor may apply to court for permission

 Court to decide balance between rights of secured creditor and interests of creditors as a whole

Question 7

Can an administrator sell fixed charge/ HP property?

Answer 7

Yes - with court’s permission. Net proceeds to secured creditor. (Plus possibly more if shortfall.)

(File order with registrar within 14 days.)

Question 8

Can an administrator sell floating charge property?

Answer 8

Yes - but floating charge holder has same rights over the proceeds.

Question 9

Who can challenge an administrator’s actions?

Answer 9

creditor or member if
 interests of applicant or creditors/members unfairly harmed, or
 not acting as quickly or efficiently as possible

Question 10

Who can bring an action for misfeasance against an administrator?

Answer 10

the official receiver,
creditor,
contributory,
liquidator,
administrator,

Question 11

What remedies are available to the court where an administrator has committed misfeasance?

Answer 11

court may order administrator/ former administrator to
 repay, restore or account for money or property
 pay interest
 pay compensation to company

Question 12

What is the position where the administrator makes antecedent recoveries?

Answer 12

Funds recovered under these provisions are excluded from floating charge property and for benefit of ordinary unsecured
creditors

Question 13

When did the right to assign actions come into force for administrators?

Answer 13

1 October 2015

Question 14

When must progress reports be provided in an administration?

Answer 14

within ONE MONTH of end of each 6 month period commencing with appointment

 within one month of ceasing to act as administrator

Question 15

Who receives a progress report?

Answer 15

Creditors
Court
CH

Question 16

What is the order of payment of administrator’s expenses?

Answer 16

 Expenses incurred in proper performance of administrator’s functions
 Costs of any security provided by the administrator (i.e. their bond)
 * Costs of the applicant or appointor in appointing an administrator
 Costs of statement of affairs and any statements of concurrence
 Administrator’s necessary disbursements (out of pocket expenses)
 Remuneration of any persons authorised to perform services for the company
 * Administrator’s remuneration and approved pre-appointment costs
 Any corporation tax due on chargeable gains when realising assets

NB: If there are insufficient assets to meet all of the expenses in full, the court can vary this order of priority and make such order as it thinks just

Question 17

How is remuneration fixed in an administration?

Answer 17

The basis of remuneration is determined by:
 The creditors committee
 Failing which, a decision of the creditors

 UNLESS: the administrator has made. a statement that the company has insufficient property to enable a distribution to be made to unsecured creditors other than by virtue of the prescribed part:
 In which case only the approval of each secured creditors; plus
 [where a distribution has been or is to be made to them] a decision of the
preferential creditors

 Can apply to court if not approved or insufficient

Question 18

What is the position re preadmin costs?

Answer 18

 A statement of pre-administration costs must be included in the administrator’s proposals
 Whether their own costs or the cost of another insolvency practitioner

Payable alongside administrator’s remuneration.

Question 19

What is the waterfall of payments in administration?

Answer 19

Fixed charge security
Sums payable Re: CIGA Moratorium (if within 12 weeks of administration)
Administrator’s remuneration and expenses Sums due to preferential creditors
Prescribed part for unsecured creditors
Sums due to floating chargeholder
Unsecured creditors (only with permission) Statutory interest