Rescue procedures
ADMINISTRATIONS
This procedure is designed to protect companies from their creditors while a
restructuring plan is developed. The type of creditor action that administration will stop
includes:-
• Bailiffs distraining on behalf of rating authorities
• Landlords distraint for arrears of rent
• Action by Revenue and Customs & Excise to enforce their debt
Following changes to legislation introduced in September 2003, the administration
procedure is now streamlined which has resulted in reduced costs and better returns to
creditors. An Administrator can be appointed by filing documents at court and with a
few exceptions, the administration must be concluded within a year.
The purpose of the administration must achieve;
1) Rescue of the company as a going concern or if that is not possible
2) Achieving a better realisation of the company's assets than in a liquidation
Only if the neither of the first two purpose are possible, can the administrator use the
third purpose:-
3) Realising property in order to make a payment to the company's secured or
preferential creditors
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