Administration

Question 1

Administration is often used as an alternative to Liquidation with a view to..-3

Answer 1

RESCUING comp in fin. Difficulty allow to continue as a GCONCERN

Achieve BETTER RESULT for CREDITORS than could be achieved through Liquidation

REALISING PROPERTY to pay off secured creditors

Question 2

Administrator. Can be appointed by -3

Answer 2

MEMBERS/D. providing liquidation not already begun

Holder of a QUALIFYING FLOATING CHARGE over comp assets

COURTS in response to a petition (c will only appoint administrator if comp is/ is likely to become UNABLE to pay its debts & courts feel administration will help meet objectives rescuing comp etc

Question 3

Advantages of administration -3

Answer 3

MEMBERS less likely to lose their investment

CREDITORS will still be able to trade with company if the administration is successful , if company liquidated creditors lose a customer

CREDITORs more likely to be paid . In liquidation unsecured creditors likely to receive nothing

Admin provides TIME to develop alternative plan survival ( liquidation = cessation of comp any future benefits that may have been generated would be lost

Question 4

Consequences of Administration

- administrators powers include - 5

Answer 4

REMOVAL/ appointment D’s

CALLING MEETINGs of creditors and/or members

Presenting/defending a PETITION for liquidating the company

MAKING PAYMENTS to SECURED/ preferential creditors

Making payments to unsecured creditors if this would assist the objective of the administration

Question 5

Protections to company upon appointing administrator? - 4

Answer 5

D’s continue in office (although their powers are suspended)

NO RESOLuTIONS to wind up comp may be passed

Petitions for Liquidation are dismissed

Rights of CREDITORs to enforce security over comp assets are SUSPENDED

Question 6

The proposals of the administrator must be approved by the creditors

Approval can be given by -4

Answer 6

Virtual meeting

Electronic voting

Correspondence

Deemed consent process

Question 7

Administration will end when ..

The administration must normally be completed …

Answer 7

It is completed/ administrator is discharged by courts

……

The administration must normally be completed within 12 months of date it commenced

( this term can be extended with consent court or by a majority of the creditors