Insolvency matters and environmental issues—administration
Insolvency matters and environmental issues—administration

The following Environment guidance note provides comprehensive and up to date legal information covering:

  • Insolvency matters and environmental issues—administration
  • Appointment
  • Post appointment
  • Ending administration and exit from administration

Administration is a procedure designed to give an entity breathing space, with a view to either a rescue or a restructure or to allow for a better outcome for all creditors than a liquidation. The objectives of an administration (in order of priority) are:Insolvency Act 1986, Sch B1, para 3(1)

  1. a rescue of the company as a going concern

  2. a better outcome for all creditors than a liquidation

  3. a realisation of the company’s assets to make a distribution to one or more secured or preferential creditors

In practice, the primary objective is pursued as a rescue of the business rather than the corporate entity.

Appointment

Out of court appointment

An administrator can be appointed out of court by:

  1. the company itselfIA 1986, Sch B1, para 22

  2. directors of the company, orIA 1986, Sch B1, para 22

  3. a qualifying floating charge holder (QFCH)IA 1986, Sch B1, para 14

A QFCH can apply when it has a valid floating charge over the whole or substantially the whole of the company's property which empowers the holder to appoint an administrator over the company under the Insolvency Act 1986 (IA 1986). For more information on fixed and floating charges, see Practice Note: Fixed and floating charges—key cases and Q&A: What does "substantially the whole" mean in the context of a QFC appointment?IA 1986, Sch B1, para 14(3)

For more information on who can apply and in what circumstances, see Practice Notes:

  1. Out of court administration appointments-the procedure

  2. Out of court appointments—who can apply and in what circumstances?

  3. Out-of-court administration appointments—time and date of appointment

In addition, we have the following Checklists on how