What are the Costs of Administration?
Costs of Administration
There are various professional fees incurred in an Administration. This includes the Administrator’s fees as well as the disbursements for agents’ valuation fees and any legal fees.
The Administrator’s fees are split into two parts. The first part is the costs incurred before Administration which may be higher if this is a pre-pack Administration as there is more work to do. The typical cost of the pre fee in a small Administration is between £5,000 and £10,000. This can be much higher for larger companies.
Once the Administrator is appointed there are various statutory duties to carry out as well as the practical aspects of either closing the business, or selling it to a new owner or trading on. We can give you a quote for the likely level of these fees. All of the fees post administration need to be agreed by creditors and they may sometimes also be asked to agree the pre Administration fee if it has not been fixed with the directors beforehand.
The costs of using commercial agents depends on what business or assets are to be valued and the level of work involved. Agents may charge a percentage of any sale proceeds rather than for time spent.
Legal fees may be higher if this is a contested Administration, as an example because there is a winding up petition that needs to be dealt with. There will also be additional legal fees if a live business is to be sold because a sale and purchase agreement will be required.
We can obtain quotes for any of these costs if you would like to know them beforehand.
David Kirk did exactly what he said he would. I’d be lost without Administration. Without David, we would have gone bankrupt by now. Really good
Sophie M