WHY IS ADMINISTRATION NOT ALWAYS AN ATTRACTIVE OPTION FOR A FLOATING CHARGE HOLDER?
Not only does the floating charge holder have relatively little influence over the administrator, but the administrator can dispose of the assets over which the floating charge holder has security, in which case the charge holder’s priority is transferred to the net realisations of the floating charge assets. Sometimes the charge holder may be content that this will provide him with the best return in the circumstances. Sometimes the administrator may decide to keep the business running where the charge holder might have preferred an immediate sale. Sometimes the reverse. As it is, the charge holder will not usually be able to prevent the administrator having the final say, provided this is in the creditors’ interests as a whole. ARE THERE ANY ALTERNATIVES TO ADMINISTRATION? Law of Property Act (LPA) receivers We may see an upturn in the use of LPA receivers, also known as fixed charge receivers. As the name suggests, this means a receiver appointed by someone holding a fixed charge ov
