What is administration?

Administration is a formal insolvency procedure available to an insolvent (or soon to be insolvent) company. An Insolvency Practitioner can be appointed as administrator of the company and should have the following objectives in mind:

  • To rescue the company as a going concern
  • To achieve a better result for creditors as a whole than would be likely if the company was wound up
  • To realise property in order to make a distribution to secured or preferential creditors

Who appoints the administrator?

An administrator can be appointed by:

The advantages of administration

The advantages of administration include (but are not limited to) the following:

‘Pre-pack’ administration case study - restaurant business

Bailey Ahmad were approached by the company directors of a fast food concept in Soho to assist in the sale of their restaurant. Though the concept showed a great deal of promise, it lacked working capital, the benefits that come with scale and was suffering from the impact of the recession on disposable incomes. Pressure was mounting from creditors and there was a very real threat of closure, which would result in job losses, a negligible return to creditors, and the crystallization of director guarantees to the bank and landlord.

The solution

In conjunction with the directors, and with the support of their bankers, we were able to secure a pre-packaged administration sales of the company’s business and assets as a going concern to a third party who had a strong track record in the restaurant industry.

The benefits

A significant premium was achieved from the company’s assets as a consequence of the going concern sale, for the benefit of the company’s creditors

  • Jobs were saved
  • The landlord secured a new tenant
  • The pre-pack administration sale gave the business concept a second opportunity to flourish