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The costs incurred by the Administrator are paid from the company’s assets. Schedule B1 to the Insolvency Act 1986 provides that the Administrator’s remuneration and expenses are paid out in priority to floating charge security and in priority to preferential debts or the prescribed part.
[See ‘Insolvency Practitioner’, ‘Qualifying Floating Chargeholder’ and ‘Insolvency Act’.]
An Administrative Receiver is a person who is appointed in an Administrative Receivership (see Administrative Receivership).
They are an Insolvency Practitioner appointed over a company to take control of assets of the company for the benefit of a secured creditor with the right to make the appointment.
[See ‘Administrative Receivership’ and ‘Insolvency Practitioner’.]
Administrative Receivership is a remedy available only to a secured creditor of a limited company or a PLC, who has a floating charge over the company’s assets and a fixed or floating security over all, or substantially all, of those assets. The security is usually in the form of a debenture.
Administrative Receivership enables a qualified floating chargeholder owed moneys by the company to appoint an Administrative Receiver, who must be a licenced Insolvency Practitioner, who then has power to manage and sell the company’s assets.
The appointment causes the floating charge to ‘crystallise’, meaning that the company can no longer deal with the property which is the subject of the charge.
It is important to note that the appointment of an Administrative Receiver does not prevent any other creditor from taking enforcement action against the company, including petitioning for its winding-up. Nor does it prevent a landlord from exercising contractual rights to forfeit leases without leave of the court.
