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The possible outcomes

The possible outcomes

  • Part or whole of the business is rescued and jobs saved after a brief period of trading
  • The company continues to trade under the administration umbrella for a brief period whilst any remaining profitable contracts are completed
  • Assets are sold off in order to maximise realisations to pay secured and preferential creditors
  • A mixture of the 3 above occur

The administrator will usually have decided upon a strategy before the administration takes effect.

Subject to advice from professional agents, the administrators will look to trade the business for a short period (on average no longer than 6 weeks) in order to market the business for sale and find a buyer for part or the whole of the business on a going concern basis.

Such a sale might be to third parties or may be back to the existing directors in a new entity (known as a phoenix).

If a sale as a going concern is not viable then the administrators may decide to continue to trade the company in order to complete work in progress / existing contracts. 

In such a case some employees may be made immediately redundant upon administration with the company continuing to employee only those necessary to complete the profitable work.  Once the contracts have been completed the remaining employees will be made redundant. 

David Kirk ACA FABRP

David Kirk

David Kirk is a Chartered Accountant and Licensed Insolvency Practitioner.
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Business Recovery
"We were cornered and thought it was the end of the business after 20 years but he got us out of it."
Lynne Firman of Just Beds Ltd
Business Rescue
"David Kirk helped us with an Administration to rescue the business. He did exactly what he said he would do. It has worked out very well."
Chris Pratt of Elecsis Ltd
Business Renewal
"It was a very difficult decision to make to go into Administration but now I am so glad we did it. David and his team were great thank you."
Jacci Dellaway of Baylift Services Ltd
Business Renewal
“You made a very difficult time much easier for us.”
R Johns
Business Rescue
“At the initial meeting you told us the good and bad things that can happen and were honest and told us to watch out for. No one else had done that.”
J White