At Moorfields, our help with administration process begins before you even get in touch
The bad news is that if you’re visiting this page, it probably means that your business struggling to survive.
But there is some good news too. You can use the administration procedure to get yourself some much-needed breathing space. And once we’ve got started, your creditors won’t be able to take any action against you without leave of the court.
Better yet, it’s now cheaper and easier than ever to place a company into administration, and unlike in the past, you don’t even need a court order to do it. Directors, shareholders, creditors, and anyone holding a ‘qualifying floating charge’ can appoint an administrator if they deem it necessary. And that’s where we come in.
At Moorfields, our help with the administration process begins before you even get in touch. Read our guide below for advice on the process, or give us a call today to discuss it with one of our experts.
How does the administration work?
Since the Enterprise Act 2002, the administrator (that’s us) has had to perform their functions with the following objectives:
- Rescuing the company as a going concern.
- Or if that is not possible, achieving a better result for a company’s creditors than would be likely if the company were wound up.
- Or if that is not possible, realising property in order to make a distribution to the company’s secured or preferential creditors.
Once a company enters administration, the administrator takes control of its management. But when we do this at Moorfields, we always try to make use of your expertise and experience first.
Usually, the outcome is that your company either returns to solvency via a company voluntary arrangement (CVA), or is sold as a going concern alongside its assets.
What is a pre-packaged administration sale?
If a purchaser can be identified before the administration process begins, it’s possible to sell your business and assets as a going concern in a pre-packaged format. A sale contract would be agreed prior to the administration and completed by the administrators as soon as they are appointed.
As administrators, we would have a duty to maximise the return to creditors. We’d also need to be satisfied that the pre-packaged sale represented the best, or indeed only deal available to them.
That’s why at Moorfields we have a dedicated transaction support team, which can provide valuation advice, as well as find sources of funding to facilitate the transaction.
What’s the alternative to pre-packaged administration sale?
Another option is to launch an administration trading strategy. This centres upon marketing the business and its assets with a view to selling them off and securing the best possible deal for creditors.
Often, the strategy during this period relies upon identifying a party who is willing to fund the costs of the administration. If you need any assistance with finding this source of finance, we may be able to help in certain circumstances.
What is administrative receivership?
An administrative receiver may be appointed by a lender holding a floating charge over a company’s assets. Once appointed, the receiver will take control of the management of the company.
If Moorfields is appointed as a receiver, we try to use the expertise and experience of existing directors and staff when continuing to trade.
The usual outcome of an administrative receivership is the sale of the business as a going concern.