Administrations can provide a breathing space for companies
This article is from Sarah Wege, a Senior Case Administrator at Antony Batty & Company’s London office. She points out that Company Administrations place as much emphasis as possible on company rescue and have been utilised in high profile cases such as Debenhams and Laura Ashley. They continue to be a valuable part of the insolvency and rescue regime in the UK.
Some examples of our work in this area can be found in this article and demonstrate this point. It is likely that we will see an increase in Company Administrations as the various Covid support schemes wind down and more companies fall into insolvency.
Administration – objectives and benefits
Company Administrations were introduced in the Insolvency Act 1986. The Enterprise Act 2002 significantly enhanced Administrations, placing greater emphasis on company rescue.
‘The administrator’, a licensed insolvency practitioner, is appointed to manage a company’s affairs, business and property for the benefit of the creditors, when it is insolvent. The objective of a company administration is to rescue it as a going concern, or if this is not possible then to obtain a better result for creditors than would otherwise be likely if the company were to be wound up.
For directors and companies under creditor pressure, an Administration provides a breathing space where:
- the Administrator can be appointed swiftly by filing a sworn notice at court,
- the company is protected against legal action from its creditors, such as a winding up petition.
- the Administrator can continue to trade the company whilst a turnaround or structured exit is achieved.
Administrations have been utilised in high profile cases such as Debenhams and Laura Ashley and continue to be a valuable part of the insolvency and rescue regime in the UK.
Some of the Company Administrations we have worked on recently
At Antony Batty and Co, we have experience of Compoany Administrations across a wide range of industry sectors, many of which have resulted in a much better outcome than liquidation. We have been able to:
- Achieve enhanced realisations and therefore a better result for creditors. We traded an online clothing company profitably for a short period then sold the stock, with distributions paid to secured and preferential creditors to date.
- Sell forward bookings and IP for tour operator. This was achieved through a pre-pack administration sale, with subsequent further asset sales. To date, distributions have been paid to secured and preferential creditors. We have experience and expertise as administrators of travel companies and have recently been appointed joint administrators of I.O.W Tours Limited.
In addition, our recent appointments have included companies specialising in letting residential property, theme park ownership, operation of arts facilities, food manufacturing and post-production.
Two brief administration case studies
These two case studies, where we are the administrators, demonstrate the focus on company rescue:
- Immersive Escapes Limited
Immersive is the holding company behind Dinosaurs in the Wild, a family-orientated, interactive show which has been staged in London, Manchester and Birmingham. As Joint Administrators (appointed in June 2020), we are negotiating with domestic and overseas buyers seeking to purchase the business and assets with a view to staging the show internationally.
- Sundance Holdings Limited
Sundance produced and distributed fruit and vegetable juice to the hospitality industry in London and the surrounding areas, including to well-known five-star hotels. In recent times, Sundance has additionally sold produce directly to the public through its online delicatessen. The Joint Administrators are initiating a sale process for the business and assets.
Contact us if your company is insolvent and you think Administration might be the answer
With our main office in London, plus regional offices in Bournemouth, Brentwood and Salisbury, Antony Batty & Company provides independent, large firm thinking by local experts at sensible prices. Click here to see some of our testimonials.
If your business is facing financial difficulties, contact us or call us on 0208 088 0633 for a FREE initial discussion.
