The following Environment guidance note provides comprehensive and up to date legal information covering:
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:
a rescue of the company as a going concern
a better outcome for all creditors than a liquidation
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.
An administrator can be appointed out of court by:
the company itself
directors of the company, or
a qualifying floating charge holder (QFCH)
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?
For more information on who can apply and in what circumstances, see Practice Notes:
Out of court administration appointments-the procedure
Out of court appointments—who can apply
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