Administration - out-of-court appointment by QFCH Flashcards
(7 cards)
when will a floating charge be ‘qualifying’?
A charge will be a qualifying floating charge if:
o The charge states para 14 of the Insolvency Act applies or that it permits the chargee to appoint an A or A receiver; +
o The chargee has security over all or most of the company’s property (NB: there can be one FC, multiple FCs, or other security so long as one is an FC); +
o It must be enforceable
when can a QFCH not make an out-of-court appointment?
o The company is in liquidation/administration (inc. if a provisional liquidator / administrator has been appointed); or
o The company has entered a moratorium
what are the three key stages?
- serving a notice of intention on any prior ranking QFCH
- possible response from QFCH
- filing the notice of appointment
explain the notice requirements
does the QFCH need to file a copy with the court?
A QFCH cannot make appoint an A unless:
o It has given at least 2 business days’ notice to any prior ranking QFCH (NOI); or
o The QFCH has already consented in writing
Filing the NOI with the court is not compulsory but it is necessary if the QFCH wants the company to benefit from an interim moratorium
how might the prior ranking QFCH respond? what is the time frame?
The prior ranking QFCH then has 2 business days to either:
o Appoint an A; or
o Consent in writing
what documents are filing with the notice of appointment?
what must be inc. with the NOA?
o A’s consent
o Evidence NOI was given or written consent from prior ranking QFCH
o Fee (unless an NOI was filed as this would have been paid then)
The NOA must inc. a statutory declaration that:
The appointer is the holder of the FC;
It is enforceable; and
The appointment complies with the Insolvency Act
when does the administrator’s appointment take effect?
Appointment takes effect as soon as the NOA is filed
they must be told as soon as practicable + given a sealed copy of the notice
