If your company is in financial distress, there is a good possibility that it may be wound up by creditors. However, there are many times when a business can be rescued with the assistance of an administrator. If you are the director of a financially distressed company, it is important to understand both the administration and liquidation procedures and how they might affect your business. Ben Cowgill at The Insolvency Experts explains further. Administration is a formal procedure whereby an Insolvency Practitioner (IP) is appointed as the administrator by either the company, its directors, its creditors or court. Once an administration order is granted, legal actions against the insolvent company are halted. Following appointment the administrator provides creditors with their report and statement of proposals, to be approved. The report includes details of the administration strategy employed, work undertaken to date, together with details of all remaining assets to be realised and an estimated outcome for creditors. The administrator has control over all assets and business operations with the aim of acting in the best interest of the company’s creditors, in order to repay them as much as possible. Administration puts the control of your company into the hands of an IP who can devise an appropriate strategy for the business and assets. The options that may be examined during this time include a pre-pack administration sale, sale of the business as a going concern after an extended period of marketing, or a break up sale of the business and/or its assets. If appropriate, entering into a voluntary administration early can be the best way to maximise your ability to avoid liquidation or any other negative action, with the primary focus of maximising the value of the business and assets. We understand that we are the last people you want to speak to but be assured that our ultimate goal here at The Insolvency Experts is to find a means to assist your company survive financial distress. If your company is unable to keep up with financial obligations and you’re concerned about the possibility of going into receivership, or you’d like to discuss the option of administration contact The Insolvency Experts now on 0300 303 8284 or via our enquiries page.