• About Us
• Meet The Team
• Factoring Services
• Insolvency Services
• CVA
• Pre Pack

When a Company Faces Administrative Receivership

Contact the UK’s Leading Experts in Business Recovery Today...

A company might face administrative receivership when it is unable to pay secured debts to a creditor. Although many creditors may be willing to negotiate with the business a voluntary arrangement which provides the business a bit of time to settle those debts, many times those arrangements break down. As a result, the receiver appointed by the creditor, most often a bank, will take over receivership administration of the company's assets and day to day running. The director is no longer in charge of his or her duties.

There are also times when the director and shareholders foresee financial matters will not be improving any time in the near future and may place the company in voluntary receivership (appointed by the creditor) to realise assets to pay the secured debts. In either case, the company may or may not be returned to its original owners or shareholders. One thing is for sure. After administration receivership liquidation of assets to pay secured debt the company will most likely not resemble its model prior to going into receivership and administration.

Administrative receivership is not the type of receivership that is enforced by government entities. For example, if the government takes over a business and places it into receivership due to alleged wrongful business practices, that would not constitute administrative receivership. That would be another form of receivership and the official receiver would be an officer of the court. Administrative receivership most often results in civil penalties whilst an official receiver can suggest criminal charges as well if warranted. Other than making every effort to operate above the law, there isn't much which can be done to prevent official receivership. On the other hand, finding a way to pay secured debts or negotiating payment arrangements through a debt rescue company might just be the impetus needed to avoid administrative receivership.

Find out more...