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/
What are the powers of the administrator?
- Powers to trade and manage business (like an AR)
- powers to appoint and remove directors.
- dispose of floating charge assets as if they were not subject to charge
- Power to bring action against directors
Can administrations bring action under:
- S212 (misfeasance)
-s216 (phoenix company;s)
No
Can an administrator bring action under
S238 undervalue
S239 preferences
S244 extortionate credit
Can an AR?
Administrator - Yes
An AR cannot
In administrations, what is the relevant time for S238, 239 and 245?
If appointment out of court: from the date of filling notice of INTENTION to appoint administrator
IF no QFCH and therefore no need to serve notice of invention to appointment, the date of appointment of administrator will be taken
in cases where application to court for an admin order, the date of application is taken
Does an administrator have power to require supplies from a utility company?
S233 - yes
Can an administrative receiver make an application for an administration order?
No
What is the status of the administrator in relation to the Company?
The company’s agent
Is there a statutory time limit on administrative receiverships?
No
Is there a statutory time limit on administrations?
Yes - 12 months
Does an administrative receivership have moratoriums?
No
How long does an administrator have to send out proposal?
8 weeks
Administration - How many days do directors have to give notice to a QFCH of a para 22 appointment?
5 business days
Administration - How many days do QFCH have to give notice to a previous QFCH of a para 14appointment?
2 business days
Administration - how long do directors have to give SoA?
11 days
Administration - how soon must a creditors decision be held?
and how much notice do they need?
Within 10 weeks
Must give 14 days notice
Administration - how soon do you have to notify companies house?
7 days
Administration - how soon do you have to advertise?
As soon as reasonably practicable
Administration - how many creditors must approval proposal?
Simple majority, over 50% IN VALUE OF THOSE PRESENT AND VOTING
Does an administrator have to complete CDDA?
Yes - within 3 months
Within what time frame must an administrator send notice of results of creditors meeting to creditors?
ASARP
Administration - is a moratorium automatically granted to a company entering Administration?
Yes
