Waterfall of payments in administrative receivership—the position under the Insolvency (England and Wales) Rules 2016
Produced in partnership with South Square
Waterfall of payments in administrative receivership—the position under the Insolvency (England and Wales) Rules 2016

The following Restructuring & Insolvency guidance note Produced in partnership with South Square provides comprehensive and up to date legal information covering:

  • Waterfall of payments in administrative receivership—the position under the Insolvency (England and Wales) Rules 2016
  • Administrative Receivership
  • Future developments

Administrative Receivership

The order of distribution in administrative receivership is not well-delineated in IA 1986 and (from 6 April 2017), IR 2016, SI 2016/1024, and is a matter of case law.

Realisation of free assets (those not subject to a floating change)

Higher ranking security

Realisations of an administrative receiver (other than realisations of assets subject to a floating charge, as to which please see: Floating charge realisations below) must first be applied in discharge of any security ranking in priority to the charge under which they were appointed.

Any priority security interest having been satisfied, the order of application of realisations from fixed charge assets is as follows.

Costs of preserving and realising the assets

First, the administrative receiver must discharge any costs of preserving and realising the assets, whether incurred by the receiver or (if the company is in liquidation) by the liquidator for the benefit of the chargee.

Costs, remuneration and expenses of the administrative receiver

Second, payment must be made of the administrative rece