Company Administration
What is an Administration?
This is a relatively new procedure, which is aimed at rescuing companies by protecting them from their creditors whilst a restructuring plan is developed.
An insolvency practitioner is appointed Administrator and will manage the company’s affairs, business and assets for the benefit of creditors.
An Administrator is appointment by either:
- An order of the court;
- The holder of a floating charge; or by the company or its directors.
- The Administrator’s primary goal is to rescue the company as a going concern.
Pre Pack Administration or Phoenix
If the business can be salvaged, but for sound legal and financial reasons cannot go down the CVA route then a pre pack administration may be appropriate. Sometime referred to as a Phoenix is has had some bad press reenlty and yet remains both a legal and excellent way to restructure a company. We have has some great success in pre pack administrations where all stakeholders including creditors, customers, and shareholders gain. Typically, the directors of the old company arrange to buy he old companies assets, forming a new company (a phoenix) to act as the vehicle for the purchase. However, one of the problems with Phoenix is that the directors of the new company often struggle to raise the finance required to buy the assets of the old business.
Even before the current banking crises, it was unlikely that there will be much bank appetite to offer an overdraft loan facility to the new Phoenix business. As such, we can arrange appropriate financing of the new start up either from external partners or via our parent Company Incubator Capital Partners.
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