Trading a company in administration—the office-holder's point of view Administration can be used for a variety of different reasons, but one of the main advantages is to use the benefit of the moratorium while trying to find a purchaser for the business. This gives a breathing space from pressing creditors while maintaining the value of the business in order to look for a purchaser. See Practice Note: The moratorium in administration. This Practice Note provides an overview on what practical issues the administrator will consider when deciding whether to trade a company in administration, and what practical considerations to take into account during the initial stages if they decide to go ahead. Advantages of trading for the company Trading for a short while can facilitate a sale of the business and/or assets on the open market, which may lead to better realisations for unsecured creditors than a liquidation and can enhance fixed security realisations. It opens the market up to all potential purchasers, whereas a pre-pack is by necessity a more closed process. See Practice Note: What is a pre-pack administration sale? In addition, a trading sale can save a lot of employee jobs. As a general rule, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006), SI 2006/246 apply and employees who are transferred into a new company upon the sale of the business will have continuity
Schemes of arrangement—process and statutory framework Schemes of arrangement—definition and basis in statute A scheme of arrangement is a court-sanctioned compromise between a company and its creditors or members. The subject of a scheme of arrangement may cover anything that the company and its members or creditors would not otherwise be able to agree between themselves; the scheme process allows such a compromise to be implemented without the support of 100% of the interested parties. The implementation of schemes of arrangement is governed by Part 26 of sections 895–907 of the Companies Act 2006 (CA 2006), Pt 26, ss 895–901, although almost identical sections have existed for well over 100 years within the companies legislation in various forms. While CA 2006 does not prescribe the process specifically, it defines the process indirectly by prescribing the requirements for the court to sanction a proposed scheme (Re Rodenstock). It is mandatory to use electronic filing (e-filing) in all jurisdictions of the Rolls Building, which includes the Insolvency and Companies List (formerly the Bankruptcy and Companies Courts of the Chancery Division). It is no longer possible to issue claims or applications, or to file documents, on paper—instead all issuings and filings must be made online using the CE-File website. For further reading, see News Analysis: E-filing at the Rolls Building: some practical considerations for R&I lawyers. The extension of e-filing to the Business
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Witness statement for a trustee in bankruptcy’s possession and sale application concerning the bankruptcy’s home Applicant: [insert initials and surname]: 1st: (exhibits).1–4: [insert date] 20[insert year] Court Reference No: [INSERT COURT REF. NUMBER] [ IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS [OF ENGLAND AND WALES OR IN [INSERT LOCATION]] INSOLVENCY AND COMPANIES LIST (ChD) OR IN THE COUNTY COURT AT [INSERT LOCATION] [BUSINESS AND PROPERTY COURTS LIST] OR IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION [INSERT LOCATION] DISTRICT REGISTRY ] IN BANKRUPTCY IN THE MATTER OF [INSERT DEBTOR’S OR BANKRUPT’S NAME] AND IN THE MATTER OF THE INSOLVENCY ACT 1986 [Insert name of the trustee in bankruptcy] The trustee in bankruptcy of [Insert the name of the bankrupt] Applicant And [Insert name(s) of the respondent(s)] [Respondent OR Respondents] Witness statement of [Insert name of the trustee in bankruptcy], the trustee in bankruptcy of [Insert name of the bankrupt] (in bankruptcy) in support of an application for an order for possession and sale I, [insert name of the trustee in bankruptcy], of [insert the trustee in bankruptcy's business address, firm and title] chartered accountant and licensed insolvency practitioner, will say as follows: 1 I am the Applicant in this matter and am the trustee in bankruptcy of [insert the name of the bankrupt] (the 'Bankrupt'). 2 The matters set out in this witness statement are true and within my own knowledge except where I indicate otherwise. Where I rely on
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Restructuring and Insolvency analysis: this article looks at the convening hearing of Smile Telecoms which seeks to exclude creditors without a genuine economic interest. The plan also seeks to bind foreign shareholders for the first time. Written by Katharina Crinson, Will Snowden and Craig Montgomery of Freshfields Bruckhaus Deringer LLP.
Restructuring & Insolvency analysis: On 19 August 2021, the High Court sanctioned the restructuring plan of Amicus Finance plc (in Administration) (Amicus). This is the first restructuring plan of a company in administration and the first in the mid-market, following the introduction of this new restructuring tool in June 2020 by the Corporate Insolvency and Governance Act 2020. Written by Steve Cottee and Serena McAllister of Pinsent Masons LLP, who acted for the joint administrators of Amicus Finance plc.
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