Administrative Receivership (ADR)

Administrative Receivers are increasingly rare as they can only be appointed by a Qualifying Floating Charge holder (QFCH)

  • Who holds a Floating Charge over the whole or substantial part of the company’s assets
  • and
  • The Charge was created prior to 15 September 2003

Administrative Receivers are normally appointed by a Bank or other lending institution or by a consortium of banks.

An Administrative Receivership is broadly similar to an Administration.

Summary of ADR Procedure

The Lender This procedure is available only to a Lender with Floating Charge security granted prior to 15 September 2003
Default The Lender can appoint an Administrative Receiver when the borrower is in default of or in breach of the terms of the security document. The appointment of a Receiver usually follows a demand for repayment
Acceptance of Appointment The Receiver must formally accept his appointment
The Receiver The Receiver then notifies Companies House, the Company itself and its creditors. The Receiver must also advertise his appointment in The London Gazette and an appropriate newspaper
Realisation of Assets The powers and the capacity of the Receiver depend upon the security document which should be referred to in all cases. The security document would normally enable the Receiver to carry on a company’s business and realise its assets. Whilst in office, the Receiver acts as the agent of the company until liquidation
Creditors Report Within three months of his appointment, the Receiver must send a report to the creditors and convene a Creditors Meeting to receiver the report. If, in the meantime, the company has gone into liquidation, the report need only go to the Liquidator.
Conclusion of Receivership The receivership is concluded and the Receiver ceases to act in office when he has realised the security, repaid any preferential creditors (if possible) and the appointer and Companies House are notified.