Administrations are a protective temporary measure and therefore are technically not designed to deal with payments to unsecured creditors. Payments to unsecured creditors will normally be dealt with through an alternative exit company insolvency procedure such as liquidation or a CVA.
- However, the first amounts generally to be paid out of any floating charge realisations (recoveries) in the administration are the costs and fees of the administrator in performing their functions for the benefit of the company’s creditors;
- The administrator’s costs and fees rank above payment of all other creditors except for a fixed charge holder, such as a bank who might hold a mortgage over a freehold property. Without the permission of the bank such property could not be sold and as such the realisations will be distributed to the bank first for payment of their mortgage.
At Francis Wilks & Jones, we have a team of dedicated insolvency experts, with experience in administration orders and the priority of getting paid. Whatever your question, we can help you.