- the appointed administrator of a company must attempt to rescue the company as a going concern and attempt to obtain a result for the creditors of a company as well as realising the property in order that a distribution can be made to creditors;
- either a court application is made to place a company into administration or a document called a Notice of Appointment of an administrator is filed in court and at the moment of the filing of the Notice of Appointment in court, the administrator can take control of the company. This can be done by either the directors of the company by an out of court route or a creditor of the company who holds a qualifying floating charge over the company;
- a company placed into administration obtains a moratorium which means that action cannot be taken against the company whilst the moratorium is in place which gives the company time to reach some form of settlement with its creditors;
- realising the property of the company can be done by selling the business as a going concern, usually in a form that is called a “pre-pack” sale. The insolvency practitioner will then put together a report that is known as a Statement of Insolvency Practice Support 16 (SIP 16) report. This report will inform the creditors of the company the reason for the company being sold as a pre-packaged sale.
It is likely directors will have met with an insolvency practitioner and the insolvency practitioner will step into the shoes of the directors of the company to deal with the assets.
Please call one of our team who would be happy to talk through any aspect of company administration with you. Our friendly experts can help.