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Chapter 11

Who can appoint an administrator?

An administrator can be appointed by any of the following persons:

 The court in response to a petition by e.g. a creditor, the directors or the
company itself.

– The court will only agree to appoint an administrator if it is satisfied that:

 The company is or is likely to become unable to pay its debts, and

 The administration order is likely to achieve its objectives.

 The holder of a qualifying floating charge over the company’s assets

 The company or its directors provided that winding up has not already begun.

Consequences of administration

The appointment of an administrator has the following effects:

 The company enters into a 'moratorium' a period during which:

– The rights of creditors to enforce any security over the company’s assets
are suspended

– Any petition for winding up is dismissed

– No resolution may be passed to wind up the company

– No other legal proceedings can be commenced

– No property which the company has under an HP/leasing agreement can
be recovered without consent of the administrator or the court.

 The directors still continue in office, but their powers are suspended

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