Chapter 15 - Procedure for administration Flashcards
Out of court admin appointment Para14 QFC - what are the pre conditions? (5)
- FC must be valid and enforceable
- any prior QFC holder has consented or does not object
- Company is not already in AR, unless AR consents to stand down or voidable charge
- Co. not in liquidation or admin (unless liquidator is appointment or QFC appointing where compulsory)
- No provisional liquidator appointed
Out of court admin appointment Para14 QFC - what is the first step after pre-conditions are met?
Notice of intention to appoint:
- Bank offical completed notice of intention to appoint
- Appointing QFC holder gives 2 business days notice to any prior QFC holder (or obtains consent)
- File in court copy of notice of intention to appoint
Interim moratorium kicks in
Out of court admin appointment Para14 QFC - what notice needs to be given to prior QFC holders for notice of intention to appoint?
2 business days
Out of court admin appointment Para14 QFC - what is the next step after notice of intention to appoint?
Notice of appointment
File in court:
- notice of appointment (3 copies) including stat declaration
-evidence that QFC holder has been given notice (or has given consent)
-administrators statement and consent
Statutory declaration contained within notice of appointment for administration (out of court QFC) must be dated not more than how many days prior to filing?
Stat dec must be dated not more than 5 business days prior to filing of documents
Statutory declaration contained within notice of appointment for administration (out of court QFC) must include what? and be dated within what timeframe?
- Confirms appointor holds QFC
- QFC is enforceable
- Appointment complies with B1 (ie correct notices given etc)
not be dated more than 5 business days prior to filing.
Out of court admin appointment Para14 QFC - what is the final step after notice of intention to appoint and notice of appointment?
Sealing of documentation
Court seals 3 copies of NoA and endorses with date and time of filing.
if QFC can email or fax out of hours and then hand in docs when court next open.
Out of court admin appointment Para22 Directors/Company - what are the pre conditions?
- ALL QFC holders consent (or not object)
- in previous 12 months, no admin order under para22 , no CVA mortarium unless CVA successful
- No AR in office unless consents to stand down or voidable charge
- Company not in Liquidation and no outstanding WU petitions or applications for administration
- COMPANY UNABLE TO PAY ITS DEBTS
Out of court admin appointment Para22 directors/company - what notice needs to be given to prior QFC holders for notice of intention to appoint?
5 business days
If the company has been in administration in the previous 12 months, can an administrator be appointed?
-via a QFC holder
-via director/company
QFC - Yes
Director/Company - No
If the company has a WU petition presented but not yet disposed off (before notice of intention to appoint), can an administrator be appointed?
-via a QFC holder
-via director/company
QFC - Yes
Director/Company - No, but it does not preclude an appointment where petition is presented after the notice of intention has been issued.
If an administration application has been made and not yet disposed off, can an administrator be appointed?
-via a QFC holder
-via director/company
QFC - Yes
Director/company - No
Can QFCH or directors/Company appoint an administrator if company is in liquidation? (voluntary or compulsory)
QFC - No
Directors/company - No
Can QFCH or directors/Company appoint an administrator if an Administrative Receiver if Company is ready in office?
QFCH - No
Director/company - No
Para 22 director/company administration, can the application be emailed/faxed
No
Para 22 director/company administration, what needs to be filed with notice of appointment?
- 3 copies notice of appointment
- Stat dec (directors entitled to make appointment, its in accordance with B1, all QFCH have been given notice and consent
- Administrators statement
Administration - what needs to be included within the administrators statement?
IP consents
Details of prior professional relationships
Stat purpose of administration is likely to be achieved
Para 22 director/company out of court administration- does a resolution need to be passed?
Director - yes valid board resolution authorising appointment
Company - Yes ordinary resolution in GM authorising named shareholders to appoint administrator
Administration - Court appointment - pre conditions
- Not already in administration
- Not in CVL
- Company is insolvent
- order likely to achieve purposes of administration
Can a liquidator of a company in liquidation make an administration application?
Yes - via the court
Can a QFCH make an administration application where a company is in compulsory winding up?
Yes - court must discharge the winding up order
Court application for admin, what are the steps?
Application
Statement from administrator
Witness statement from application (why want an admin order)
File and serve on QCF, petitioner, proposed administrator, company
Certificate of service
Court application for administration - what order could the court make?
Make admin order
Dismiss application
Make interim order
Make a winding up order
Make any other order as court thinks appropriate
Administration - when is the interim moratorium in place?
Where QFCH has filed notice of intention to appoint or
Application to the court but application has not yet been dealt with/has been granted but not yet ‘taken effect’`
How long does an interim moratorium in an administration last?
Court appointments
Out of court appointments
Court appointments: Interim moratorium will last until the earlier of the expiry of 5 business days or the appointment of an administrator.
Out of court appointments, maximum duration of interim moratorium is 10 business days
Does an interim moratorium prevent:
presentation of a winding up petition by the Financial services authority or by the secretary of state on ground of public interest?
No
Does an interim moratorium prevent:
appointment of an AR
No
The interim moratorium will not come into effect unless and until the appointer consents to the AR stepping down
When does the full moratorium come into effect?
When the administration takes effect, usually time specified in court order, or if no time specified when the order is made.
Effect of full moratorium on:
Administrative receivership
Once company is in administration, no new AR can be appointed
Note that where an AR has been appointed and does not consent to appointment of an admin, it will not be possible for the company to be placed into administration. Unless found it is avoidable or consents to step down
Effect of full moratorium on:
Other receivers, other than AR
Must vacate office if administrator so requires.
If allowed to remain in office, will be unable to enforce the appointers security without the consent of the administrator or permission of the court.
Effect of full moratorium on:
Impact on winding up
No resolution may be passed for winding up the company or order made.
This does not apply to orders make on public interest of FSA petitions
Administration, Effect of full moratorium on:
Creditors with proprietary rights
unless the consent of administrator or permission of the court is obtained
No steps may be taken to enforce any security.
No steps may be taken to repossess goods in company’s possession under a HP agreement
If a moratorium is in place, can a landlord institute or continue CRAR or exercise right of forfeiture.
No
If moratorium is in place - can legal processes including legal proceeding and executions be instituted or continued against the company?
Not without consent of administrator or permission of the court.
On appointment of administrator, who must they give notice to and in what timeframe?
Registrar or Companies within 7 days
Pension scheme - 14 days
Then must advertise as soon as reasonably practical.
Note ASARP to
-Any AR, enforcement officer, supervisor of CVA, creditors, company
Administration - when does the Statement of Affairs need to be completed?
As soon as reasonably practical the administrator shall require one or more relevant persons to provide a SoA
Relevant person has 11 days to submit SoA
A copy of the administration proposal needs to be sent within what time frame?
As soon as reasonably practical, but within 8 weeks from the date the company went into liquidation
Who must be sent a copy of the proposal of the administration?
Registrar of companies, all creditors and members.
In an administration - when must a creditors decision be made within to approve the proposal?
Decision date must be within 10 weeks beginning on the date that the company entered administration.
In an administration, how much notice should be given for the decision procedure of creditors?
Creditors must be given 14 days notice
What are the three scenarios where an administrator does not need to see creditors approval?
- Company has sufficient property to pay the creditors off in full
- Company has insufficient property to make a distribution to unsecured creditors other than under the prescribed part rules.
- Neither of the objects in para 3(1)(a) or (b) can be achieved ie no prescribed part and no funds at all to unsecured.
Automatically approved after 8 business days (but not fees)!
Administration - min and max numbers for a creditors commitee
min 3 members and max 5 members
Committee does not come into being until administrator has issued a certificate of its du constitution.
When must progress reports be done in an administration?
Within one month of the expiration of 6 months from date of appointment, and every subsequent 6 months.
Administration - if don’t need creditors approval of proposal, how soon will be be automatically approval?
8 business days
Administration - if don’t need creditors approval of proposal, how many need to object for it not to automatically be approved?
Within what timeframe?
within the 8 business days and backed by 10% by value of creditors
How long do you have to notify creditor of a move from administration to CVL?
As soon as reasonable practicable
How many times can you ask creditors to extend administation?
Once
How many times can you ask the court to extend administration? Can you then ask the creditors for extension?
Unlimited
No, once asked court, cant then as creditors
Creditors committee must give how many days notice to require the administrator to attend before them?
7 days
In the event that an administrator is appointed out of court by directors of the Company Para 26 requires notice of the intention to be served on any debenture holder with a qualifying floating charge and copied into which?
The company
An enforcement officer
Any CRAR creditor
The Gazette
Registrar of Companies
The Court
Supervisor of any voluntary arrangement
The company - Yes
An enforcement officer - Yes
Any CRAR creditor - Yes
The Gazette - No
Registrar of Companies - No
The Court - No ?????
Supervisor of any voluntary arrangement - Yes
At a creditors decision in administration proceedings which date is used for value a creditors claim?
Date Company entered into administration
