Similar to CVA but more structured & controlled by Court. The AO is an order directing that during the period in force the affairs of the Co. are managed by a person ADMINISTRATOR appointed by the Court
Introduced in 1986 Act as a constructive way to try to save some Cos.
The application is by petition to the Court by Co. or creditors
Court must be satisfied that Co. is insolvent but that order will achieve it's survival. It must be in the interests of Creditors - realise more of assets
On making the order management of Co placed into hands of Administrator who is an IP
During period of Company Administration Order - NO CREDITOR CAN ENFORCE PRIOR DEBTS OR DEBTS WHICH MAY ARISE DURING PERIOD OF Company Administration Order
Co remains liable for any local taxes throughout and Administrator not personally liable under present law
Administrator has to formulate proposals for running Co during period of Company Administration Order
Proposals put to a meeting of Creditors
Committee of Creditors can be formed - monitors Company Administration Order
Grievances to Court
The authority may petition if local taxes not paid as ongoing - not tested
From date of presentation of petition to discharge of Company Administration Order LAs are powerless to enforce any debt without leave of Court
This would not normally be given The Administrator cannot deal with any claims for arrears prior to his appointment and if distraint has been taken prior it cannot be continued
LAs should ensure that ongoing liabilities will be met on presentation of proposal
