When a company breaches the terms of its borrowing from a creditor with a floating charge, that creditor may appoint an administrative receiver. Many companies give such a charge to banks as security for their borrowing.
Since September 2003 there have been strict restrictions on the ability of floating charge holders to appoint administrative receivers and this insolvency process isn’t frequently used.
When we are appointed Administrative Receiver we have extensive powers to deal with the charged assets. We effectively take over management of the company’s business from the board of directors and can have it continue to trade prior to selling the business and assets. Our main function is to recover sufficient funds to pay the costs of the receivership, the preferential creditors and the charge holder. If the company has more assets than are required to make these payments, the surplus is normally passed to a liquidator, who deals with creditors’ claims.
If Administrative Receivership is the best way to proceed, we can be appointed Administrative Receiver, we have strong connections with clearing banks and asset-based lenders whose support is necessary for these appointments – plus we have the experience and expertise to work with you in achieving maximum realisations as part of a value-added process.