If your company is having financial difficulties you (or a secured creditor – see Administrative Receivership) can apply to the court to place it into Administration.
Administration places your company under the control of an Administrator, who is an insolvency practitioner who will deal with its affairs, business and property. Whilst in Administration your company has the legal protection of the court and creditors are prevented from taking any action against it without the permission of the court or the administrator.
Some Administrations are known as ‘pre-packs’ – this means that an agreement to sell some or all of the business has been reached before the Administrator is appointed. There are strict rules about when a ‘pre-pack’ can be used and the procedure for entering into this type of procedure. They can be used in certain circumstances, primarily where a pre-pack is the best way to achieve the best outcome for creditors.
Right for your business?
Administration is designed to help struggling but potentially viable companies. It is an effective process, but the circumstances need to be right and there are clear guidelines to comply with. Administration is likely to impact on trading relationships with key suppliers. We have wide experience of dealing with Administrations and we can handle all aspects of placing a company into Administration.
Prompt advice is crucial for you to determine whether Administration is the best option for your business. To discuss your options, call us today on 0114 285 9500.