As a legal concept, administration is a procedure under the insolvency laws of a number of general law jurisdictions, similar to bankruptcy in the United States. It serves as a rescue mechanism for bankrupt entities and enables them to run their business. The process - in the United Kingdom called "under administration" - is an alternative to liquidation, or may be a precursor. Administration begins with the administrative command . A company in the curator administration is operated by an administrator (as a temporary executive head with custodial responsibility for the company's assets and liabilities) on behalf of its creditors. The administrator can recapitalize the business, sell the business to the new owner, or demote it into a commercially available element and close the rest. Most countries distinguish between voluntary (board-deciding) and voluntary (court-decided) curators. In a voluntary administrative curator, the administrator is appointed by the company director. In a non-voluntary administrative curator, the administrator is appointed by a court of law. The legal provisions for this process vary from country to country, and the process may overlap.
Video Administration (law)
Australia
In Australia, an external administrator, also called a bankruptcy practitioner, is an independent person who is formally appointed to control the business of a bankrupt company. The external administrator may be appointed either by the director of the company, the secured creditor, or by the court, and includes: temporary liquidator, liquidator, voluntary administrator, deed administrator, controller and recipient. A curator is when an external administrator known as a "recipient" is appointed by a creditor who is guaranteed to sell the company's assets to pay back the guaranteed debt, or by the court to protect the company's assets or perform other tasks.
Voluntary Administration is when bankrupt company directors appoint an external administrator to investigate whether company closures can be prevented or delayed and to make recommendations to their directors and creditors whether or not the company should enter into a corporate regulation deed, be injured (liquidated), or returned to control of the board of directors. The "corporate governance deed" is a binding agreement between the business and its creditors overseen by the certificate administrator relating to how the company's assets will be managed to ensure a better return for its creditors than for immediate closure.
When a creditor petitioned the court to seek the liquidation of the court (a court-ordered verdict) of the bankrupt company, the court appoints a "temporary liquidator" to temporarily protect the company's assets while the closing application is pending. Administrators are required to become registered liquidators because they have extensive powers to handle corporate property. The appointment of administrators "freezes" any legal proceedings against the company, and the control of the company is fully granted to the administrator. Company directors are prohibited from acting in their capacity as directors for administrative duration, the wile administrators are personally liable for any debts incurred by the company in the administrative process.
Maps Administration (law)
Canada
The Bankruptcy and Insolvency Act provide a mechanism for consumers and general proposals to allow time for bankrupt people to be able to reorganize their affairs. For a bankrupt company (or affiliated group) that owes more than $ 5 million, a more flexible regime is available under the Company Credentials ("CCAA") Act.
United Kingdom
In English law, the administrative regime is governed by the Bankruptcy Act of 1986, as amended by Company Law of 2002. An "administrator" may be appointed without petitioning to court by a floating charge holder (made since 15 September 2003), by the company or by the directors. Other creditors must file a petition in court to appoint an administrator. The administrator must act in the interests of all creditors and try to save the company as a survival. If this proves impossible he must work to maximize the recovery of creditors as a whole. Only then can administrators attempt to realize property by one or more secured creditors. A company usually resides in the Administration for no more than 12 months, after which an extension of the court may be produced under court policy. Administration is analogous to entry into "Chapter 11" in the United States, although there are some major differences, primarily derived from the fact that British law does not include debtors in the concept of ownership. During the reorganization period, as a result, administrators typically run businesses rather than directors, and additional liquidity requirements effectively must be met by funds provided by existing creditors rather than by super-senior 'financing' DIPs.
The Administrator is a court officer and agent of the company, and is personally not responsible for any contract he makes on behalf of the company. They have the power to do something necessary or necessary to manage the business, business, and property of the company. The new administrative regime introduced by Enterprise Act 2002 replaces the previous situation in which curatorial administration is available as an alternative to administration, which has traditionally been a rescue-oriented insolvency regime. This regime allows the holder of a floating charge to appoint an administrative recipient to realize his beneficial assets, and also to block the administrative orders sought by the borrower. This is felt to be too profitable for the floating charge holders at the expense of other creditors. Holders of floating charges created before September 15, 2003 retain their right to appoint an administrative recipient, but all rights recognized to do so are made after that date shall be construed as the right to appoint an administrator (subject to certain exceptions, certain rarities). A court order is issued which prohibits all forms of legal or bankruptcy proceedings without court permission. Appeals to courts for administrative orders may be made by companies, directors, creditors or a combination of them. The Enterprise Act 2002 amends the 1986 Repayment Liability Act to provide an out-of-court process to appoint an administrator to a floating charge holder or company or its director. It's much cheaper and simpler than the previous system, which involves apps to court.
Order administration
In the United Kingdom, administrative orders are processes designed to protect limited companies from their creditors while debt restructuring plans are made and presented to creditors and courts. This administrative proceeding process requires a licensed bankruptcy practitioner to act as an administrator appointed by the court.
Pre-packaged administration
Pre-packaged is the process of selling company assets immediately upon entering the administration. It sometimes happens that the previous director or management bought the company's assets from the administrator and set up a new company. This process has the advantage of allowing administrators to realize greater amounts for assets due to business continuity and that the company's goodwill is maintained. Company employees are also usually transferred to a new company, preserving work. Pre-package has drawn criticism because of the appearance given to unrelated parties that the company has just proceeded without its creditors. SIP 16 was introduced in January 2009 to assist Insolvency Practitioners in pre-packaged cases. It is designed to make the process more transparent to creditors and to ensure that fair value is earned for assets.
In November 2009, the Office of Fair Trading announced a study of corporate bankruptcy, with a special focus on pre-packaged administration. It will report whether the insolvency market operates efficiently, with sufficient freedom of competition between insolvency practitioners and whether consumers and creditors are treated as fair as possible. A recent example of a pre-packaged package is the sale of Cobra Beer's assets to Coors as soon as Cobra Beer enters administration. This allows brands to continue and save jobs, but also leaves suppliers from the bag with an estimated Ã, Â £ 75 million.
Individual administrative orders in England, Wales and Northern Ireland
In this process, a debtor who has enough money left after the priority creditor and principal disbursements may be able to regulate voluntary arrangements individually. (Debtors with less serious problems may prefer a debt management plan.)
Republic of Ireland
The Republic of Ireland runs a similar process called the examiner, but the company needs permission from the High Court to enter and exit the examiner.
New Zealand
In New Zealand, the voluntary administration is covered by the Companies Act 1993, as amended by Company Regulation (Voluntary Administration) in 2007.
See also
- Administration (English football)
- Curator administration
- Chapter 11, Title 11, United States Code
- Checking similar processes in the Republic of Ireland
Note
External links
- The Hmg Scarcity Service Website
- The UK Bankruptcy Practitioner Institute website
- IPAA (Insolvency Practitioners Association Australia)
Source of the article : Wikipedia
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