Administration is a beginning, not an end

There have been so many well-known names that have gone into administration in the past few weeks that its been hard to keep up.


Administration – a beginning not an end

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T M Lewin, Cafe Rouge, Bella Italia, Harveys Furniture, Intu and Wigan Athletic have all contacted insolvency professionals recently to act as administrators and look to save or sell parts of their businesses so they can survive. 

 

We’ve been doing our level best to keep you up-to-date with all the latest developments but by writing about so many we’ve discovered a recurring but potentially misleading theme that we’d like to correct. 

 

The number of articles and stories we’ve seen that imply that administration is a terminal end of life event for a business is staggering. 

 

It’s also not true. 

 

Yes, administration is an insolvency event and could eventually lead to a company going into liquidation and it’s assets being sold off to repay creditors depending on the individual circumstances of the business, but it can also prove to be a shrewd step. 

 

It can buy valuable time for a business to restructure its debts and financial affairs and offer the company and creditors a fair and equitable way forward for both of them. 

 

It protects a business from aggressive creditor demands and legal actions such as statutory demands and winding-up petitions.*

 

*Under the Corporate Insolvency and Governance Bill 2020, these and other measures are suspended until at least September 30th 2020. Once this suspension is lifted, then an administration will further prevent creditors from using them.  

 

An insolvency or liquidation would mean that a creditor would probably be looking at taking a loss on their investment but an administration would give them a chance to recoup more or at least break even.

 

Chris Horner, Insolvency Director with Business Rescue Expert said: “Administration is one of those procedures that sounds daunting and even a little scary at first but the more you learn and find out about it and its advantages, the more appealing it becomes.

 

“No two administrations are the same. Our experienced team will answer any questions you have about the process and will take into account the unique circumstance a business faces and how best to address them.”

 

Get in touch with us today and we can book your free initial consultation – you can give us an idea about what issues your business has to overcome and we can help plan a way to meet and beat them.

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