Chapter 14 - Introduction to administrations Flashcards
What are the 3 hierarchical purposes of administration set out in para 3(1) of Schedule B1 of the act:
a) ‘rescue the company as a going concern’
b) 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)
c) realising the property in order to make a distribution to one or more secured or preferential creditors i.e no payment to unsecured.
Is achieving the approval of a CVA or sanctioning of a s895 CA 03 Scheme of arrangement a statutory purpose of an administration?
No
However both procedures can be used by admin to achieve the three specified objectives.
Who may appoint an administrator out of court?
- Qualifying floating charge holders
- the directors (under Para 22)
- the company
Can an out of court appointment for admin be made by directors or company where:
-Petition for winding up has been presented and not disposed of?
No
Can an out of court appointment for admin be made by directors or company where:
-Application to court for admin has been made and not yet disposed of?
No
Can an out of court appointment for admin be made by directors or company where:
-An Administrative receiver of the company is in office
No
Can an out of court appointment for admin be made by directors or company where:
-the company is in compulsory liquidation or a provisional liquidator appointed?
No
Who can make an application for a court appointed administration order?
Para 12
-The Company
-the directors
-creditors
-supervisor of CVA
-liquidator where company is in voluntary or compulsory liquidation
-QFCH where company is in compulsory winding up
Can the Court make an administration order where an Administrative Receiver is in office?
No, unless:
- appointing debenture holder consents or
- if an admin order were make , a charge is likely to be voidable under either the transaction at under value, preference or invalid floating charge provisions.
Can an AR appointment be made where an administration moratorium has been obtained in the previous 12 months?
Yes
Are administrations recognised under the EC Regulation?
Yes
Are administrative receiverships recognised under the EC Regulation?
No
Does an administration or an AR have the benefit of a moratorium?
Administration - Yes
AR - No
Usually, how long does an
- Administration
- AR
last?
Administration - 1 year
AR - no statutory time limit
Duties of an administrator:
- be a qualified IP
- officer of court, act fairly and impartially
- perform functions quickly and efficiently
- must take custody and control of all property
- must manage the affairs/business/property of Co.
- Must comply with court direction
- must submit a return on conduct of directors
- must request SoA
- must advertise their appointment
- must call a meeting to set out the proposals
- has stat. power to make distributions to secured and pref creditors/
