Judgement when a company is in administration.

arcon5

Depends how they are brought out... If somebody agrees to invest and keep the company alive then you can enforce a judgement at a later date when they are out of administration. If somebody buys the brand and stock etc your judgement will disappear with the company, possibly receiving a few % at a push. The former is highly unlikely.

Are you saying you went to court knowing they was in administration? If so I presume you applied for judgement by default? This is a high risk strategy which probably won't work I'm afraid.

arcon5

dalesrider wrote: »

I think we need a lot more info from the OP. Before any options can be put forward.

Even without more info there's nothing wrong about suggesting possible avenues. Especially since most companies going in to administration won't come out of it, doesn't really leave much in options anyway

zzzLazyDaisy

bris wrote: »

Administration is not the end of a company, it means the administrators have been brought in to run the company to determine it's final outcome. At the initial stage it's protected from it's creditors and everything is put on hold (still trades) until everything is assessed..

This is true.

BUT - a company only goes into administration if it is insolvent. That is to say, it does not have enough assets to pay its debts. Administration is an alternative to liquidation, and an Insolvency Practitioner is brought in to oversee the administration (The Administrator).

The intention is sometimes to sell it on as a going concern, although often it is simply a case of fulfilling the current orders and selling off any leases and assets while the company is still trading, in order to maximise the funds available for distribution to creditors.

Sometimes the administrators take the business on and trade it themselves, with the intention of trading it out of administration. If that happens then yes, the company remains intact and the creditors get paid in full. More often, though, even if the business is sold, the debts fall into the insolvency, and the business is sold on as a going concern, but as a new entity.

OP you need to make sure the Administrators have up-to-date information about the debts that are owed to you, and then wait and see what happens. Unfortunately there is no way to by-pass the process, or to put yourself in a position above other creditors.

bris

zzzLazyDaisy wrote: »

This is true.

BUT - a company only goes into administration if it is insolvent. That is to say, it does not have enough assets to pay its debts. Administration is an alternative to liquidation, and an Insolvency Practitioner is brought in to oversee the administration (The Administrator).

The intention is sometimes to sell it on as a going concern, although often it is simply a case of fulfilling the current orders and selling off any leases and assets while the company is still trading, in order to maximise the funds available for distribution to creditors.

Sometimes the administrators take the business on and trade it themselves, with the intention of trading it out of administration. If that happens then yes, the company remains intact and the creditors get paid in full. More often, though, even if the business is sold, the debts fall into the insolvency, and the business is sold on as a going concern, but as a new entity.

OP you need to make sure the Administrators have up-to-date information about the debts that are owed to you, and then wait and see what happens. Unfortunately there is no way to by-pass the process, or to put yourself in a position above other creditors.

No, not at all think Comet, 2 years ago it was sold for £1, this was a total buy out that protected the creditors and all business assets, sold as a going concern. The fact it is now bust is not the point, at that point it was saved. The intention was not to sell of Comets leases etc, that is what liquidation is. There are plenty more instances where administrators have sold businesses and saved them, it's the number 1 priority. Administration is not always the end.

Evilm

bris wrote: »

No, not at all think Comet, 2 years ago it was sold for £1, this was a total buy out that protected the creditors and all business assets, sold as a going concern. The fact it is now bust is not the point, at that point it was saved. The intention was not to sell of Comets leases etc, that is what liquidation is. There are plenty more instances where administrators have sold businesses and saved them, it's the number 1 priority. Administration is not always the end.

It is however very rare the the company in question go forward under the same company name and number and not to dump the liabilities. Most of the time they 'phoenix' leaving behind all liabilities and buying the assets and the customer base into a new company name - usually for very little actual payment.

If its not a retail business the Administrators will usually retain the rights to funds due to be paid on any invoices issued pre-administration too - although they will have fun getting it (I've done that part of the work myself and some companies will try to avoid paying as much as possible no matter if there was anything wrong or not).

The Administrators are left to dispose of the old company entity and pay out what they can to the creditors. Some creditors might be lucky and might be able to get ransom payments out of the new company in return for agreeing to deal with the new company going forward.

I suspect OP doesn't have an ongoing relationship which the new company wishes to foster. Unless this is one of the very rare cases in which the company does continue to trade under the old entity OP is at the mercy of the administrators.

zzzLazyDaisy

"No, not at all think Comet, 2 years ago it was sold for £1, this was a total buy out that protected the creditors and all business assets"

That is what I meant when I said the intention is trading it out of administration. Sorry I didn't make myself clear.

This is where the administrators move in and continue trading until a buyer can be found who will take on the whole concern as it is, for whatever price is agreed. In that case the company is sold on as it stands and there is no change to its identity, assets or debts.

Unfortunately it is more often the case that a buyer cannot be found to take on the whole company, debts and all - in which case the administrators must do whatever is necessary to maximise the funds available for creditors - Land of Leather is a case in point, no buyer was found and the stores closed fairly quickly after the administrators were appointed, but then the administrators traded the company for months - long enough for all outstanding orders to be fulfilled.

dalesrider

arcon5 wrote: »

Even without more info there's nothing wrong about suggesting possible avenues. Especially since most companies going in to administration won't come out of it, doesn't really leave much in options anyway

Well we could.

But what is the point of putting forward worthless information. When with a few keystrokes the OP could give us a decent overview of the issue and get proper solid advice.

There could be chargeback or S75 options. But I would not like to put these forward. When we do not even have basic info such as how it was paid for.
For all we know it could have been a cheque or banking payment which have no options other than going to court.

TheCookieMan

miserable_ol_so_n_so wrote: »

Please can someone tell me what happens if I obtain judgement in a county court against a company that is in administration.

You cannot obtain judgement without first obtaining consent of the adminsitrators or consent of the court. In reality it is unlikely to be cost effective to do this

In particular:
1.Can I instruct the court bailiff to go and collect the sum ordered? and is the administrator obliged to pay up?

Even if you have CCJ the priority set out in the Insolvency Act cannot be changed - you cannot instruct bailiffs (a moratorium prevents this).

2.If 1 above is not possible, but if eventually the company does recover, will I then be able to collect the judgement?

As other posts have stated whilst the first objective of Adminsitration is to rescue the company the majority of such insolvencies rely on the other 2 objectives (better result for creditors than liquidation or pay secured creditors). Where that objective is achived this is usually through a CVA which typically gives creditors a certain % of their debt back over 3 - 5 years.

As other posts have mentioned there are many asset sales out of administration and on occasion the buyer may honour deposits or gift cards etc. However this is not usually contractually binding.

On rare occasions the creditors are paid in full.

3. How much debt is necessary for me to enforce bankruptcy order on the debtor company?

Thanks in advance.

As a creditor you can ask the Adminsitrators to place it into Liquidation (bankruptcy is for individuals). They may do this anyway if they have money to pay to creditors.

Overall I would suggest you make sure the Administrators know what you are owed and see if there are other means of recovering payment - i.e. if you paid by card. Other than that there isn't much you can do other than wait to see what happens.

miserable_ol_so_n_so

Yhank you TheCookieMan for your comprehensive reply.