What Is an Administration Sale?


An administration sale involves the sale of all company assets – including stock and premises – to a new buyer, typically immediately upon an insolvency practitioner being appointed as administrator. This can be the preferred option for preserving jobs, value and trade whilst the administrator assesses the potential to exit out of administration.

Depending on the financial position of the company, the administrator may choose to rescue the business through restructuring to make it viable again, sell the business and preserve employment or liquidate the company. The process offers protection from creditor action as well as a structured environment in which to explore these options.

Insolvency Administration Sale: Strategies and Considerations

Once the company enters administration, a Statement of Affairs will be prepared and submitted to creditors detailing details of the company’s affairs, assets and liabilities. During this period the directors relinquish control of the company and are unable to interfere with proceedings. Unsecured creditors are unable to influence proceedings but can submit their claims in writing to the administrator who will keep them updated on progress. During this time any employees transferred over to the new company will be protected by TUPE (Transfer of Undertakings and Protection of Employment) legislation.

If a sale of the company as a going concern is possible, it will provide higher returns for creditors and a higher chance of retaining jobs. However, there will be costs associated with the administration that need to be settled and a legal requirement for the public to be made aware of the company being in administration through a notice placed in The London Gazette.

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