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An administration is an insolvency
process now governed by the law set out at sections 248-250
of the Enterprise Act 2002 and schedule 31 to that act.
The act became law, as far as administrations
are concerned, on the 15th September 2003.
The main thing to remember about
administrations is that:
"An administration freezes
creditors actions."
By that is meant:
- landlords cannot distrain
- creditors cannot pursue court
judgments
- winding up petitions cannot
be pursued
- bailiffs cannot seize assets
or take "walking possession"
- H P companies cannot recover
their assets
That "freeze" on creditors
enforcement procedures gives the time needed to consider alternatives
and to put a rescue plan in place.
An administration is, therefore,
quite often an interim step to achieve a later objective such
as a company voluntary arrangement.
In many instances an administration
can, however, stand on its own without necessarily there being
a later insolvency process.
An administrator has a very wide
range of powers including the right to dismiss directors!
Take care and work out a strategy if you are considering the
appointment of an administrator to your company.
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