Q&As

If a company in administration has sold its assets and business to the directors of that company, do they have any right as directors to know who were the other potential purchasers of the business and assets?

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Produced in partnership with Caroline Clark
Published on LexisPSL on 21/09/2018

The following Restructuring & Insolvency Q&A produced in partnership with Caroline Clark provides comprehensive and up to date legal information covering:

  • If a company in administration has sold its assets and business to the directors of that company, do they have any right as directors to know who were the other potential purchasers of the business and assets?

If a company in administration has sold its assets and business to the directors of that company, do they have any right as directors to know who were the other potential purchasers of the business and assets?

The directors of a company remain in office after the appointment of an administrator although, as the administrator has the power to carry on the business of the company and to do any act on behalf of the company under Schedule 1 of the Insolvency Act 1986 (IA 1986), the directors can only exercise their management powers with the administrator's consent. The administrator has the power under IA 1986, Sch 1 to sell the property of the company and so does not need to involve the directors in any aspect of the process of selling the company's assets. The administrator therefore does not need to disclose the names of other potential purchasers of the company's business and assets to the directors in order to carry out his duties as administrator.

The administrator is bound by the Insolvency Code of Ethics, a fundamental principle of which is confidentiality. 'An insolvency practitioner should respect the confidentiality of information acquired as a result of professional and business

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