An Administration is a procedure to deal with the closure of your company if the company is insolvent – in other words, there are not enough company assets which can be sold or realised, to pay off all the debts of the company.
An Administration procedure is to be used (rather than a CVL or a CVA or a Pre-pack Administration) if there is part or all of the business that can be sold or is worth trying to salvage. Of course, this is something that we will carefully review with you to make sure the right process is chosen to deal with your company.
As part of our work we will speak to your bankers, HMR&C and any major supplier to explain the plan in more detail and get their support. These are delicate negotiations and not all Insolvency Practitioners have the experience or expertise to do this.
On appointment as Administrator my team and I will effectively take charge of the day to day running of the business.
Immediately after my appointment as Administrator we will need to;
• Obtain an independent valuation of the business
• Work out a marketing strategy covering a 2 to 3 week period
• Work out a trading strategy for the business
The purpose of the Administration is to try to sell the business on the most advantageous terms for the creditors. Usually, a sale would be agreed with an entirely independent purchaser or sometimes there may be a Management Buy Out (MBO) to the existing management. I would need to demonstrate that the sale of the business using the Administration procedure has a better outcome for creditors than any other insolvency process.
Once a purchaser for the business is found a sale and purchase agreement agreement would be drawn up. If all goes well, this should be done around week 4 of the Administration.
If there are no suitable offers for the business, as Administrator I would ultimately have to cease trading and close the business.
We will arrange for these things to be done as quickly as possible, as time in these circumstances is often scarce.
Once decisions have been made, I could be appointed as Administrator within days.
A report to creditors outlining the strategy needs to be prepared by the Administrator and sent to creditors within 8 weeks of the appointment. No meeting of creditors is required unless specifically requested by the creditors, which is unusual.