The Compendium

Supervisor of a Company Voluntary Arrangement (CVA). This is the ‘in court’ option.

A company can be put into Administration by filing at court a Notice of Appointment and certain specified supporting documents. This procedure may be commenced by either the company or its directors, or a party (often a bank or other commercial lender) which has a floating charge and is a qualifying floating chargeholder. This is the ‘out of court’ procedure.

The Administration of a company automatically ends after one calendar year, unless the creditors or the court agree to an extension.

In practice, many companies remain in Administration for more than one year and complex Administrations can last several years.

If the Administration leads to the rescue of the company as a going concern, the officeholder hands control of the company back to the directors once the Administration ends. However, this is rare in practice.

More commonly, the net proceeds of the company’s assets are distributed to the company’s creditors, either by the Administrator or by a subsequently appointed Liquidator (who may be the same person as the Administrator, just acting in a different professional capacity).

Depending on the circumstances, the Administration can therefore end either by the company moving into Liquidation, or by the company being dissolved without a Liquidation.

(See ‘Pre-Packaged Administrations’.) [See ‘Enterprise Act’, ‘Qualifying Floating Chargeholder’, ‘Chargeholder’, ‘Insolvency Act’, ‘Insolvent’, ‘Company Voluntary Arrangement’, ‘CVA’, Pre- Packaged Administrations’ and ‘Liquidation’.]

Administration Order – Partnership

A partnership can apply for an Administration Order under schedule B1 of the Insolvency Act 1986 and Article 6 of the Insolvency Partnership Order 1994.

This process is conducted in exactly the same way as the Administration of a company; in order to try and rescue the business, usually by continuing to trade and seeking a buyer of the business/assets.