• Chapter 9 Chapter 9 — Functions of Administrator

    • 95. General powers

      (1) The administrator of a Company may do anything necessary or expedient for the management of the affairs, business and property of the Company.
      (2) A provision of this Part 1 (Administration) which expressly permits the administrator of a Company to do a specified thing is without prejudice to the generality of subsection (1).
      (3) A person who deals with the administrator of a Company in good faith and for value need not inquire whether the administrator is acting within his powers.
      (4) The administrator of a Company has the powers specified in Schedule 2 (Powers of the Administrator).
      (5) The administrator of a Company —
      (a) may remove a Director of the Company; and
      (b) may appoint a Director of the Company (whether or not to fill a vacancy).
      (6) The administrator of a Company or of a Deed of Company Arrangement may call a meeting of members or creditors of the Company.
      (7) The administrator of a Company or of a Deed of Company Arrangement may apply to the Court for directions in connection with his functions. The administrator of a Deed of Company Arrangement may also apply to the Court for directions about a matter arising in connection with the operation of, or giving effect to, the Deed of Company Arrangement.
      (8) A Company in administration or an officer of a Company in administration may not exercise a management power without the consent of the administrator of the Company.
      (9) For the purpose of subsection (8) —
      (a) "management power" means a power which could be exercised so as to interfere with the exercise of the administrator's powers;
      (b) it is immaterial whether the power is conferred by an enactment or an instrument; and
      (c) consent may be general or specific.
      (10) The Board may by rules prohibit or restrict the disposal, hiring out or sale of property of a Company by an administrator to a person who is or was a particular kind of Connected Person of a Company, in such circumstances and subject to such conditions and requirements as may be prescribed, and the powers of an administrator under subsection (4) shall be subject to such prohibition or restriction.

    • 96. Distribution

      (1) The administrator of a Company may make a distribution to a creditor of the Company. Schedule 5 (Proofs and Distribution) shall apply to distributions made or proposed to be made by the administrator of a Company to any class of creditors other than secured creditors.
      (2) Section 227 (Preferential Debts) shall apply in relation to a distribution under this Section as it applies in relation to a winding-up with references in that Section to "expenses" being instead to expenses properly incurred in an administration under this Part 1 (Administration).
      (3) A payment may not be made by way of distribution under this Section to a creditor of the Company who is neither secured nor preferential unless the Court gives permission.
      (4) The administrator of a Company may make a payment otherwise than in accordance with subsections (1) to (3) or paragraph (13) of Schedule 2 (Powers of the Administrator) if he thinks it likely to assist achievement of the purpose of administration.

    • 97. General duties

      (1) The administrator of a Company shall on his appointment take custody or control of all the property to which he thinks the Company is entitled.
      (2) Subject to subsection (3), the administrator of a Company shall manage its affairs, business and property in accordance with —
      (a) any proposals approved under Section 64 (Business and result of initial creditors' meeting);
      (b) any revision of those proposals which is made by him and which he does not consider substantial; and
      (c) any revision of those proposals approved under Section 65 (Revision of administrator's proposals).
      (3) If the Court gives directions to the administrator of a Company in connection with any aspect of his management of the Company's affairs, business or property, the administrator of the Company shall comply with the directions.
      (4) The Court may give directions under subsection (3) only if —
      (a) no proposals have been approved under Section 64 (Business and result of initial creditors' meeting);
      (b) the directions are consistent with any proposals or revision approved under Section 64 (Business and result of initial creditors' meeting) or Section 65 (Revision of administrator's proposals);
      (c) the Court thinks the directions are required in order to reflect a change in circumstances since the approval of proposals or a revision under Section 64 (Business and result of initial creditors' meeting) or Section 65 (Revision of administrator's proposals); or
      (d) the Court thinks the directions are desirable because of a misunderstanding about proposals or a revision approved under Section 64 (Business and result of initial creditors' meeting) or Section 65 (Revision of administrator's proposals).

    • 98. Administrator as agent of Company

      In exercising his functions under these Regulations the administrator of a Company acts as its agent.

    • 99. Charged property: floating charge

      (1) The administrator of a Company may dispose of or take action relating to property which is subject to a floating charge as if it were not subject to the charge.
      (2) Where property is disposed of in reliance on subsection (1) the holder of the floating charge shall have the same priority in respect of acquired property as he had in respect of the property disposed of.
      (3) In subsection (2) "acquired property" means property of the Company which directly or indirectly represents the property disposed of.

    • 100. Charged property

      (1) The Court may by order enable the administrator of a Company or of a Deed of Company Arrangement to dispose of property which is subject to security (other than in the case of an administrator of a Company a floating charge) as if it were not subject to the security.
      (2) An order under subsection (1) may be made only —
      (a) on the application of the administrator of the Company or of a Deed of Company Arrangement; and
      (b) where the Court thinks that disposal of the property would be likely to promote the purpose of administration or the Deed of Company Arrangement in respect of the Company.
      (3) An order under this Section is subject to the condition that there be applied towards discharging the sums secured by the security —
      (a) the net proceeds of disposal of the property; and
      (b) any additional money required to be added to the net proceeds so as to produce the amount determined by the Court as the net amount which would be realised on a sale of the property at market value.
      (4) If an order under this Section relates to more than one security, application of money under subsection (3) shall be in the order of the priorities of the securities.
      (5) An administrator of a Company or of a Deed of Company Arrangement who makes a successful application for an order under this Section shall send a copy of the order to the Registrar before the end of the period of fourteen (14) days starting with the date of the order.
      (6) An administrator of a Company or of a Deed of Company Arrangement commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule if he fails to comply with subsection (5) without reasonable excuse.

    • 101. Hire-purchase property

      (1) The Court may by order enable the administrator of a Company or of a Deed of Company Arrangement to dispose of goods which are in the possession of the Company under a hire-purchase agreement as if all the rights of the owner under the agreement were vested in the Company.
      (2) An order under subsection (1) may be made only —
      (a) on the application of the administrator of the Company or of a Deed of Company Arrangement; and
      (b) where the Court thinks that disposal of the goods would be likely to promote the purpose of administration or the Deed of Company Arrangement in respect of the Company.
      (3) An order under this Section is subject to the condition that there be applied towards discharging the sums payable under the hire-purchase agreement —
      (a) the net proceeds of disposal of the goods; and
      (b) any additional money required to be added to the net proceeds so as to produce the amount determined by the Court as the net amount which would be realised on a sale of the goods at market value.
      (4) An administrator of a Company or of a Deed of Company Arrangement who makes a successful application for an order under this Section shall send a copy of the order to the Registrar before the end of the period of fourteen (14) days starting with the date of the order.
      (5) An administrator of a Company or of a Deed of Company Arrangement commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule if he fails without reasonable excuse to comply with subsection (4).

    • 102. Disposal of charged property

      (1) The following applies where the administrator of a Company or of a Deed of Company Arrangement applies to the Court under Section 100 (Charged property) or Section 101 (Hire-purchase property) for authority to dispose of property of the Company which is subject to a security, or goods in the possession of the Company under a hire-purchase agreement.
      (2) The Court shall fix a venue for the hearing of the application, and the administrator of the Company or of a Deed of Company Arrangement shall as soon as reasonably practicable give notice of the venue to the person who is the holder of the security or, as the case may be, the owner under the agreement.
      (3) If an order is made under Section 100 (Charged property) or Section 101 (Hire-purchase property) the Court shall send two (2) sealed copies to the administrator.
      (4) The administrator shall send one of them to that person who is the holder of the security or owner under the agreement.
      (5) The administrator must send a copy of the sealed order to the Registrar.

    • 103. Protection for secured or preferential creditor

      (1) A statement of proposals of an administrator of a Company under Section 56 (Administrator's proposals) may not include any action which —
      (a) affects the right of a secured creditor of the Company to enforce his security;
      (b) would result in a preferential debt of the Company being paid otherwise than in priority to its non-preferential debts; or
      (c) would result in one preferential creditor of the Company being paid a smaller proportion of his debt than another.
      (2) Subsection (1) does not apply to —
      (a) action to which the relevant creditor consents;
      (b) a proposal for a compromise or arrangement to be sanctioned under Part 25 (Arrangements and Reconstructions) of the Companies Regulations 2015; or
      (c) a proposal for a Deed of Company Arrangement.
      (3) The reference to a statement of proposals in subsection (1) includes a reference to a statement as revised or modified.

    • 104. Debts of insolvent Company to rank equally

      Debts other than preferential debts rank equally between themselves in the administration and, after the preferential debts, shall be paid in full unless the assets are insufficient for meeting them, in which case they abate in equal proportions between themselves.

    • 105. Challenge to administrator's conduct

      (1) A creditor or member of a Company in administration or subject to a Deed of Company Arrangement may apply to the Court claiming that —
      (a) the administrator of the Company or of the Deed of Company Arrangement is acting or has acted so as unfairly to harm the interests of the applicant (whether alone or in common with some or all other members or creditors); or
      (b) the administrator of the Company or of the Deed of Company Arrangement proposes to act in a way which would unfairly harm the interests of the applicant (whether alone or in common with some or all other members or creditors).
      (2) A creditor or member of a Company in administration or subject to a Deed of Company Arrangement may apply to the Court claiming that the administrator of the Company or of the Deed of Company Arrangement is not performing his functions as quickly or as efficiently as is reasonably practicable.
      (3) The Court may —
      (a) grant relief;
      (b) dismiss the application;
      (c) adjourn the hearing conditionally or unconditionally;
      (d) make an interim order; and/or
      (e) make any other order it thinks appropriate.
      (4) In particular, an order under this Section may —
      (a) regulate the exercise by the administrator of his functions;
      (b) require the administrator to do or not do a specified thing;
      (c) require a creditors' meeting or meeting of creditors to be held for a specified purpose;
      (d) provide for the appointment of an administrator to cease to have effect; and/or
      (e) make consequential provision.
      (5) An order may be made on a claim under subsection (1) whether or not the action complained of —
      (a) is within the powers of the administrator under these Regulations; or
      (b) was taken in reliance on an order under Section 100 (Charged property) or Section 101 (Hire-purchase property).
      (6) An order may not be made under this Section if it would impede or prevent the implementation by the administrator of a Company of —
      (a) a compromise or arrangement sanctioned under Part 25 (Arrangements and Reconstructions) of the Companies Regulations 2015; or
      (b) proposals or a revision approved under Section 64 (Business and result of initial creditors' meeting) or Section 65 (Revision of administrator's proposals) more than 28 days before the day on which the application for the order under this Section is made.

    • 106. Misfeasance

      (1) The Court may examine the conduct of a person who —
      (a) is or purports to be the administrator of a Company or of a Deed of Company Arrangement; or
      (b) has been or has purported to be the administrator of a Company or of a Deed of Company Arrangement.
      (2) An examination under this Section may be held only on the application of —
      (a) the administrator of the Company or of a Deed of Company Arrangement;
      (b) the liquidator of the Company;
      (c) a creditor of the Company; or
      (d) a contributory of the Company.
      (3) An application under subsection (2) must allege that the administrator —
      (a) has misapplied or retained money or other property of the Company;
      (b) has become accountable for money or other property of the Company;
      (c) has breached a fiduciary or other duty in relation to the Company; or
      (d) has been guilty of misfeasance.
      (4) On an examination under this Section into a person's conduct the Court may order him —
      (a) to repay, restore or account for money or property;
      (b) to pay interest; and/or
      (c) to contribute a sum to the Company's property by way of compensation for breach of duty or misfeasance.
      (5) In subsection (3) "administrator" includes a person who purports or has purported to be an administrator of a Company or of a Deed of Company Arrangement.
      (6) An application under subsection (2) may be made in respect of an administrator who has been discharged under Section 142 (Vacation of office: discharge from liability) only with the permission of the Court.

    • 107. Expenses of the administration

      (1) The expenses of the administration are payable in the following order of priority —
      (a) expenses properly incurred by the administrator of a Company in performing his functions in the administration of the Company;
      (b) the cost of any security provided by the administrator of a Company in accordance with these Regulations;
      (c) where an administration order was made, the costs of the applicant and any person appearing on the hearing of the application and where the administrator of a Company was appointed otherwise than by order of the Court, any costs and expenses of the appointor in connection with the making of the appointment and the costs and expenses incurred by any other person in giving notice of intention to appoint an administrator of the Company;
      (d) any amount payable to a person employed or authorised, under Chapter 7 (Process of Administration) of this Part 1 (Administration), to assist in the preparation of a Statement of Affairs or statement of concurrence;
      (e) any allowance made, by order of the Court, towards costs on an application for release from the obligation to submit a Statement of Affairs or statement of concurrence;
      (f) any necessary disbursements by the administrator of a Company in the course of the administration (including any expenses incurred by members of the creditors' committee or their representatives and allowed for by the administrator of the Company under this Section, but not including any payment of taxes in circumstances referred to in subsection (i) below);
      (g) the remuneration or emoluments of any person who has been employed by the administrator of a Company to perform any services for the Company, as required or authorised under these Regulations;
      (h) the remuneration of the administrator of the Company the basis of which has been fixed under Section 109 (Fixing of an administrator's remuneration) and Schedule 12 (Remuneration) and unpaid pre-administration costs approved under Section 108 (Pre-administration costs); and
      (i) the amount of any corporation tax on chargeable gains accruing on the realisation of any asset of the Company (without regard to whether the realisation is effected by the administrator of a Company, a secured creditor, or a receiver or manager appointed to deal with a security).
      (2) The priorities laid down by subsection (1) are subject to the power of the Court to make orders under subsection (3) where the property is insufficient to satisfy the liabilities.
      (3) The Court may, in the event of the property being insufficient to satisfy the liabilities, make an order as to the payment out of the property of the expenses incurred in the administration in such order of priority as the Court thinks just.
      (4) For the purposes of Section 143(3) (Vacation of office: charges and liabilities), the remuneration and expenses of a former administrator of the Company shall comprise all those items set out in subsection (1).

    • 108. Pre-administration costs

      (1) Where the administrator of a Company has made a statement of pre-administration costs under Section 57(1)(k) (Administrator's statement of proposals) the creditors' committee may determine whether and to what extent the unpaid pre-administration costs set out in the statement are approved for payment.
      (2) But if —
      (a) there is no creditors' committee; or
      (b) there is but it does not make the necessary determination; or
      (c) it does do so but the administrator of the Company or other insolvency practitioner who has charged fees or incurred expenses as pre-administration costs considers the amount determined to be insufficient,
      subsection (3) applies.
      (3) When this subsection applies, determination of whether and to what extent the unpaid pre-administration costs are approved for payment shall be —
      (a) by resolution of a creditors' meeting other than in a case falling in paragraph (b); or
      (b) in a case where the administrator of the Company has made a statement under Section 61(6)(b) (Requirement for initial creditors' meeting) —
      (i) by the approval of each secured creditor of the Company; or
      (ii) if the administrator of the Company has made, or intends to make, a distribution to preferential creditors, by the approval of —
      (aa) each secured creditor of the Company; and
      (bb) preferential creditors whose debts amount to more than 50% of the preferential debts of the Company, disregarding debts of any creditor who does not respond to an invitation to give or withhold approval.
      (4) The administrator of a Company must call a meeting of the creditors' committee or a creditors' meeting if so requested for the purposes of subsections (1) to (3) by another insolvency practitioner who has charged fees or incurred expenses as pre-administration costs; and the administrator of the Company must give notice of the meeting within twenty-eight (28) days of receipt of the request.
      (5) If —
      (a) there is no determination under subsection (1) or (3); or
      (b) there is such a determination but the administrator of the Company or other insolvency practitioner who has charged fees or incurred expenses as pre-administration costs considers the amount determined to be insufficient,
      the administrator of the Company (where the fees were charged or expenses incurred by him) or other insolvency practitioner (where the fees were charged or expenses incurred by that insolvency practitioner) may apply to the Court for a determination of whether and to what extent the unpaid pre-administration costs are approved for payment.
      (6) Paragraph 5(4), (5) and (7) (Remuneration: recourse by administrator or liquidator to the Court) of Schedule 12 (Remuneration) apply to an application under subsection (5) as they do to an application under paragraph 5(1) (Remuneration: recourse by administrator or liquidator to the Court) of Schedule 12 (Remuneration) (references to the administrator of the Company being read as references to the insolvency practitioner who has charged fees or incurred expenses as pre-administration costs).
      (7) Where the administrator of a Company fails to call a meeting of the creditors' committee or a creditors' meeting in accordance with subsection (4), the other insolvency practitioner may apply to the Court for an order requiring the administrator of the Company to do so.

    • 109. Fixing of an administrator's remuneration

      An administrator is entitled to receive remuneration for his services as such. The relevant provisions of Schedule 12 (Remuneration) shall apply in the determination of the remuneration of an administrator.