Administration - out-of-court appointment by D/the company

Question 1

what are the four main stages?

Answer 1

1. internal decision-making
2. notice of intention to appoint
3. response to notice of intention
4. filing the notice of appointment and supporting documentation

Question 2

what happens in the internal decision-making? explain when Ds take the decision and SHs

Answer 2

• D appointment = Ds resolve (by simply majority) to appoint an A; or
• Company appointment = SHs pass an OR to appoint an A

Question 3

when can the D and the company not appoint an administrator? (4)

Answer 3

o Less than 12 months has passed since the last out-of-court administration ended
o There is an unresolved/pending WUP or administration application
o An A or A receiver is already in office
o The company is in liquidation

Question 4

explain the notice of intention to appoint, inc:
- when a notice is to be served and on whom
- time scales
- filing requirements + effect

Answer 4

if there is a QFCH or any other lender entitled to appoint an administrator, Ds/the company must serve a notice of intention to appoint, a statutory declaration and the BR/OR

they must give 5 business days notice

the documents (+ fee) must be filed with the court as soon as reasonably practicable after service. Once filed, an interim moratorium arises.

this stage can be skipped if there is no QFCH or other relevant lender.

Question 5

explain the possible responses from the QFCH/other entitled lender (inc. timescales)

Answer 5

they have 5 business days to:
o Appoint an A of their choice
o Consent to the appointment
o Do nothing (D/the company must then file the NOA within 5 days)

Question 6

when it comes to filing the notice of appointment, what must be filed with the court?

what must be inc. in the NOA?

Answer 6

o A’s consent to act
o Any consent given by recipients of the notice of intention
o BR/OR (if this hasn’t been filed i.e. NOI stage was skipped)
o Fee (if this hasn’t been paid already i.e. NOI stage skipped)

The NOA must inc. a statutory declaration that:
 The person is entitled to make the appointment
 The appointment is in accordance with the Insolvency Act 1986
 The company is unable to pay its debts or info in notice of intention remains accurate

Question 7

when does the administrators appointment take effect?

Answer 7

Appointment takes effect as soon as the NOA is filed

the administrator must be told as soon as practicable + given a sealed copy of the notice