Part 9 – Compulsory winding up following administration
March 2013
56.1.125 Winding-up petitions during the period of administration
A winding-up petition presented prior to administration will be dismissed on the making of an administration order or suspended where the administrator is appointed by the holder of a qualifying floating charge (see paragraph 56.1.51 for further details). Whilst the administration is in force a winding-up petition, except in the public interest (see paragraph 56.1.52), cannot be presented without the permission of the court. In general administration proceedings and liquidations cannot run concurrently, only consecutively.
56.1.126 Liquidation proceedings after administration
Where the administration is coming to an end and the company remains insolvent a winding-up petition can be presented by the administrator (see paragraph 56.1.127) or a creditor (see paragraph 56.128).
56.1.127 Winding-up petition presented by the administrator
The administrator may present a winding-up petition to the court on behalf of the company [Note 1]. The petition must contain an application for his/her appointment as administrator to end [Note 2].
56.1.128 Winding- up petition presented by a creditor
A creditor may obtain the permission of the court to present a winding-up petition at the same time as the administrator is applying for his/her appointment to cease (see paragraphs 56.1.101 to 56.1.106 for further details). In this instance the petition should be heard on the date the administrator’s appointment is due to end to enable a winding-up order to be made immediately.
56.1.129 Official receiver’s duties on the making of a winding-up order
Where the court makes a winding-up order the official receiver has a duty to:
56.1.130 Disqualification time limits
An application for a disqualification order should be made within two years from the date of the administrator’s initial appointment. The leave of court is required to bring disqualification proceedings outside this limit. Further information on issuing disqualification proceedings can be found here in the Enforcement Investigation Guide [Note 7].
56.1.131 Appointment of administrator as liquidator
The court may appoint the administrator as liquidator on the making of the winding-up order [Note 8].
56.1.132 Initial action by the official receiver on the making of a winding-up order
On the making of the winding-up order the official receiver initially, should be looking to establish the assets and liabilities of the company as it entered administration, details of the realisation of the companies assets, if any, and how the funds received were distributed. The official receiver should write to the former administrator and obtain copies of;
56.1.133 Duty of the former administrator after the winding-up order
The former administrator has a duty to co-operate with the official receiver [Note 9]. Any former administrator is required to attend upon the official receiver for interview if asked to do so. Further information on dealing with a non co-operative former administrator can be found in Chapter 13.
56.1.134 Preferential creditors – the relevant date
Where a winding-up order is made immediately following the discharge of an administration order (see Part 2), the relevant date for the calculation of preferential claims is the date of the administration order [Note 10]. Where the company is in administration, without a court order (see Parts 3 and 4) the relevant date is the date the company entered administration [Note 11].
56.1.135 Preferences and transactions at an undervalue – the relevant date
The relevant date from which the official receiver may investigate preferences and transactions at an undervalue is the date of the administration application (see paragraph 56.1.17), the date a notice of intention to appoint an administrator was filed at court (see paragraphs 56.1.30 and 56.1.41) or the date on which the company entered administration (see Parts 3 and 4) [Note 12]. This enables the official receiver to investigate the disposal of assets by the company prior to the appointment of the administrator. Further information on preferences and transactions at an undervalue can be found in Chapter 31.4A.
56.1.136 Pre-pack administrations
Pre-pack administrations have been criticised for allowing the business and/or assets of an insolvent company to be sold or transferred to former directors or connected parties whilst leaving creditors unpaid (see paragraph 56.1.107). The official receiver should ensure the administrator complied with Statement of Insolvency Practice number 16 (usually abbreviated to SIP16) (see paragraph 56.1.107) by seeking confirmation from Insolvency Practitioner Regulation Section who undertake monitoring of SIP 16. The official receiver should obtain details of the sale or transfer to ensure the transaction was not at an undervalue or a preference (see paragraph 56.1.135) or a transaction to defraud creditors by the company’s officers [Note 13]. Where the sale or transfer is at an undervalue or is a preference the official receiver may also have a claim against the administrator for the misapplication of the company's property (see paragraphs 56.1.99 and 56.1.100). Further information on preferences and transactions at an undervalue can be found in Chapter 31.4A. Further information on transactions defrauding creditors can be found in Part 7 of Chapter 31.4B. The official receiver should ensure, if appropriate, that any new company has complied with the re-use of the name of the company in administration (see Chapter 45 of the Enforcement Investigation Guide for further details) [Note 14].
56.1.137 Avoidance of floating charges – the relevant date
The relevant date from which the official receiver may declare a floating charge invalid for the benefit of creditors generally is the date of the administration application (see paragraph 56.1.17), the date a notice of intention to appoint an administrator was filed at court (see paragraphs 56.1.30 and 56.1.41) or the date on which the company entered administration (see Parts 3 and 4) [Note 15]. Further information on avoiding a floating charge may be found in paragraphs 31.4B.41 to 31.4B.56.
56.1.138 The official receiver and administrator’s remuneration
The former administrator may apply to the court to fix his/her remuneration (see paragraphs 56.1.115, 56.119 and 56.1.120) after the date of the winding-up order. The court or the applicant may request the official receiver’s attendance. The official receiver should generally attend and will be entitled to his/her costs. The costs should be paid by the applicant and may be calculated on a time and rate basis. Where neither the official receiver, nor the administrator, is liquidator the official receiver, on receiving a request should suggest it would be more appropriate for the liquidator to attend the hearing.
56.1.139 The official receiver and the hearing to determine the administrator’s remuneration
Prior to the hearing the official receiver should ensure the remuneration and expenses have been correctly approved by the creditors committee, creditors’ meeting or the court (see paragraph 56.1.115). The official receiver should ensure that any previous payment of remuneration and/or expenses were in the correct order of priority (see paragraph 56.1.124). The official receiver may consider opposing the administrator’s application where:
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