Effect of administrative receivers’ appointment on property and the company
Produced in partnership with John Hughes of Shakespeare Martineau LLP
Effect of administrative receivers’ appointment on property and the company

The following Restructuring & Insolvency guidance note Produced in partnership with John Hughes of Shakespeare Martineau LLP provides comprehensive and up to date legal information covering:

  • Effect of administrative receivers’ appointment on property and the company
  • Statutory moratorium
  • Floating charge
  • Employees
  • Contracts
  • Landlords

Statutory moratorium

The appointment of an administrative receiver does not create an automatic statutory moratorium. As such, a company’s creditors may commence or continue any legal proceedings against the company.

Floating charge

The appointment of an administrative receiver will cause any floating charge over a company’s assets to crystallise. This means the company will not be able to deal with any of the assets subject to the floating charge. As a floating charge must be over the whole or substantially the whole of a company’s assets, the administrative receiver will effectively replace the directors.

Employees

As a general rule, employees are not immediately affected by the appointment of an administrative receiver. Employment contracts do not terminate automatically. This is subject to the three exceptions set out below, which would result in automatic