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
powers.
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
company.
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
appointed you
must not start any new proceedings against the
company.
If you have already commenced proceedings when you are
notified that an administrator has been appointed you must
