Updated: 5th November 2020
If your company has breached the terms of a debenture (loan agreement) in Northern Ireland that is secured by a floating legal charge created before 15 September 2003 then your business could be in danger of being put into administrative receivership. Continue reading to learn how we can help you save your business and its assets.
With 101 offices stretching from Inverness down to Exeter, Real Business Rescue can offer unparalleled director advice across the UK. If you need answers fast and don't feel like reading our detailed guides then feel free to call us (0800 644 6080) or send us an email for a free consultation. We'll attentively assess your situation and help you decide upon the most suitable course of action based on the unique circumstances of your case.
Administrative receivership in Northern Ireland is a formal insolvency procedure in which the holder of a debenture that contains a floating legal charge (a lender, typically a bank or other financial institution) appoints a receiver to take control of the assets of company that has breached the terms of the loan agreement. The appointed receiver then sells enough of the company's assets to repay the debenture holder.
If the company has enough assets to cover the cost of the debt then it may be able to emerge from administrative receivership and continue operating as a going concern. If, however, the company is deemed insolvent (having debts that exceed the combined value of all assets) and an arrangement cannot be reached, then the proceeding would end in the dissolution of the business.
It should be noted that an administrative receiver can only be appointed under a security instrument that was created before 15 September 2003. Any debenture holder attempting to collect a delinquent debt under a debenture created after that date would instead use company administration as a means of enforcing a floating legal charge.
First and foremost, it is important to understand that the creditor who is about to exercise administrative receivership is only interested in collecting what is owed to them. However, even if you can't come up with the total amount due it may be possible to satisfy the lender by proposing a viable payment plan in the form of a company voluntary arrangement (CVA) for Northern Ireland based companies.
It may also be possible to enter into administration voluntarily in order to place a protective moratorium around your company while an appointed administrator works to negotiate with creditors and reduce debts - read more on administration in Northern Ireland. If a receiver has not yet been appointed to take control of your company's assets then you may be able to use some of those assets as collateral to obtain secured financing that could then be used to repay the disgruntled debenture holder before they take aggressive legal action.
If you have any questions about administrative receivership or any other matter related to corporate or personal insolvency in Northern Ireland or the rest of the UK, feel free to ask one of our experts online or call us on 0800 644 6080 to participate in a free consultation.