Administration (law)

[1][2] Administrators are required to be registered liquidators since they have broad powers to deal with company property.

An "administrator" can be appointed without petitioning the court by the holder of a floating charge (created since 15 September 2003), by the company or by its directors.

[8] Administration is analogous to going into "Chapter 11" in the United States, although there are certain key differences, mainly stemming from the fact that English law does not include the debtor in possession concept.

During the reorganisation period, as a result, the administrator usually runs the business rather than the directors, and any additional liquidity requirements effectively have to be met by funds provided by existing creditors rather than by any super-senior 'DIP financing'.

Pre pack is an insolvency procedure where a company arranges a deal to sell its assets to a buyer before appointing administrators to facilitate the sale.

This process has advantages in that it enables the administrator to realise a greater amount for the assets due to business continuity and that the goodwill of the company is preserved.

Pre-packs have attracted criticism because of the appearance it gives to unconnected parties that the company has just continued without its creditors.

[9] It was designed to make the process more transparent for creditors, and to ensure that fair value was obtained for the assets.

This allowed the brand to continue and saved jobs,[11] but also left suppliers out of pocket by an estimated £75 million.

[15] In Ukraine, a system of "sanation" (Ukrainian: санація) measures take place to prevent or lessen the effect of insolvency.

[16] The basic components of those measures include providing special loans and subsidies; exemptions for issuing a credit or taxation; restructuring of the business's debts and capital; change of organizational and production structure of the debtor; full or partial nationalization; others.

The official who administers "sanation" is known as an "arbitral director" (Ukrainian: aрбітрaжний керуючий) and is appointed by a court.