The Enterprise Act 2002 modified company administration orders
(CAO’s). The procedure It is extremely flexible and
convenient to use and administrators will have a wide range of
It is anticipated that the administration will last up to 12 months or 18 months by agreement with creditors or, exceptionally, longer by application to the court.
The expectancy is that the exit route from administration will be determined within three months so that the duration of these administrations will be much shorter than traditional insolvencies.
There are three principal exit routes
There is concern that because of the inbuilt flexibility
administration may be abused where phoenixism is involved or
Section 98 creditors meetings are held. Thus as this new procedure
becomes established it may well be that administrations will
eventually outnumber liquidations.
Also there is scope for creditors (including HMRC) to seek the appointment of an administrator in place of the traditional company winding up petitions.
Enforcement and Insolvency Services Edinburgh is responsible for the setting up and lodging of claims (the processing side) for company administration cases and also for the technical aspects where HMRC debts are concerned.
Once a notice of intention to appoint an administrator is filed
at court, it effectively prohibits instituting or continuing any
legal process either against a company or against the property of a
Where you become aware that such an application has been made it will be necessary to halt any proceedings started but you should not at this stage withdraw the case. If subsequently an administrator is not appointed you should continue the action.
Once you have been informed that an administrator has been
must not start any new proceedings against the
If you have already commenced proceedings when you are notified that an administrator has been appointed you must