公司法和商法(双语)讲义 第23章Corporate and Business Law Chapter 23

23Insolvency

Overview

INSOLVENCY

Administration Liquidation

Compulsory Voluntary

Members Creditors

1 Insolvency of a company usually results in liquidation either compulsory or voluntary. Liquidation

may be avoided by administration. Liquidation may also be entered into whilst a company is still

solvent.

2 Administration orders

Purpose of administration

2.1 (a) The appointment of an administrator is designed to give companies in financial difficulty

(usually with insolvency looming) a “breathing space” from which to trade out of their

difficulties.

(b) Administrators may be appointed either by the court, the holders of floating charges created

on or post 15.9.03 and the company and its directors.

(c) If the company and its directors intend to appoint an administrator they must give five days

notice to any floating charge holder entitled to appoint either an administrative receiver or

administrator. This effectively means that a floating charge holder can either block the

company’s choic e of administrator or block the administration procedure.

(d) The administrator once appointed must perform his functions with the objective of:

(i) rescuing the company as a going concern, or

(ii) achieving a better result for the company’s creditors than winding up; or

(iii) realising property to distribute to secured or preferential creditors. Consequences of the appointment of an administrator

2.2 (a) Winding-up cannot be commenced or continued with.

(b) No goods can be recovered from the company (e.g. H.P. repossessions) without court leave.

(c) Legal proceedings can only be commenced or continued with the court's permission. Administrators proposals and powers

2.3 (a) The administrator should:

(i) Establish the state of the company’s affairs by obtai ning a statement of affairs.

(ii) Prepare proposals to achieve the aim of administration.

(b) A creditors meeting must be called within 10 weeks of administrators appointment.

(c) The meeting will

(i) accept;

(ii) accept with modifications which must be approved by the administrator; or

(iii) reject.

Powers

2.4 (a) The administrator has general powers of management derived from..

(b) He can

(i) appoint and remove directors (a unique power in company law normally only available

in an AGM)

(ii) call meetings of the members and creditors

(iii) apply to court for directions regarding the carrying out of his functions

(iv) make payments to secured or preferential creditors and with the courts permission make payments to unsecured creditors

(e) He must summon a m eeting of the company’s creditors if told to by:

(i) the court, or

(ii) 10% of the company’s creditors. s.17(IA)

End of administration

2.5 (a) The administration has been successful.

(b) Automatically (unless extended) 12 months after the date of appointment.

(c) By court order which includes the granting of a winding up petition on public interest grounds.