How much does an administration cost?

The fees for an administration will vary depending on the circumstances surrounding the company. The level of debts the company has, number of creditors, the assets and liabilities of the company, including any contingent liabilities and assets which are subject to a fixed or floating charge.

Some insolvency practitioners may require an up-front fee for any advice on administrations, we require no such payment and can provide free confidential advice. After the company directors have discussed the options available via a cost-free consultation with one of our advisors and if we are chosen to act as administrators, it is at this point the arrangement commences and the appropriate costs will apply.

What is an administration?

An administration is a formal insolvency procedure that will protect the company from creditors whilst the process is ongoing, giving the company respite from creditor pressure. Administration is also an opportunity for the company to potentially be restructured, at the same time removing inefficient or non-profitable parts of the business.

The company can temporarily continue trading as a means of raising as much cash as possible for creditors or allowing time to seek a buyer for the business or assets. Directors lose control of the day-to-day workings of the business with the administrators taking temporary charge, as they plan the best way forward, whether it be through saving the company completely, selling parts of the business or liquidating the company and realising assets.

How is an administration paid for?

The fees involved throughout the process of an administration can be covered in several different ways.

• The company temporarily continues trading
  The Company may continue to trade under the control of the Administrators and costs may be covered from any profits generated.
• Sale of company assets
  If some of the assets within the company are sold, the funds acquired could be sufficient to cover the costs incurred by the IP carrying out the administration.

Why would I want to use an administration?

For insolvent companies, there are many advantages to entering administration. It gives the company breathing space to plan for survival. It can also prevent one creditor taking action which could be to the detriment to other creditors or indeed threaten the very future existence of the company.

• Protection from creditors
  An administration provides the company with protection from creditors whilst the process is ongoing and will halt any legal action creditors have taken such as county court judgements or winding-up petitions. It can provide massive respite for company directors who may have been dealing with lots of pressure.
• The company can be restructured
  With the possibility of the company being rescue during an administration, the protection from creditors allows the insolvency practitioners a great chance of restructuring the business to perform at a higher standard. With the advantage of time, the company could end up avoiding being wound-up.
• Creditors get the best return
  Insolvency practitioners will always look to get the maximum return to company creditors. An administration can provide a great opportunity for this, as if there’s a possibility the company can continue trading it can provide a greater return to creditors.
• Employees can continue
  If the company is restructured in a manner to continue trading, short-term or long-term, it provides some or all staff to continue working and therefore continue receiving their salary.

How we can help

If you’re worried about your company being insolvent or have creditors constantly breathing down your neck, it’s crucial to act as quickly as possible. Administration is only suitable for certain companies, depending on their situation. If you think it might be right for you, we can help guide you through the process and if it would suit your company. We offer free face-to-face consultations nationwide.

To discuss your company’s position, and find out how an administration could work in your situation, get in touch with a member of our advice team for free. It is important to act as soon as possible where unaffordable company debt is concerned. Call us today to arrange your free consultation. 

In summary

Company administration is a formal procedure which must be carried out by a licensed insolvency practitioner. It enables an IP to have control of the company and giving it protection against creditors, and plan the best way forward for the business.

Although we do not require an upfront fee to carry out an administration, the costs incurred during an administration will depend on the size and nature of the company, as well as the amount of time the company is in administration for, as well as any costs incurred for the realisation of assets.

Case Studies

Catering Butchers

Kelly Burton • Leisure & Hospitality • Administration

A previously successful, family-owned and managed catering butchers saw its turnover eradicated by the Covid 19 outbreak.

Following a review of all the options with the team at Wilson Field, the directors decided to appoint WF as Administrators.

Kelly Burton, director and insolvency practitioner at Wilson Field added:

“Like many over the pandemic, unfortunately there were some difficulties encountered as the business struggled to keep up its strong sales. However, we are continuing ro release the assets for the benefit of the creditors.”

Due to a lack of funding, the business unfortunately ceased to trade, however, the Administrators have managed to secure the debtor ledger and a sale of the remaining tangible assets, for the benefit of creditors.

National Videogame Arcade

Kelly Burton • Leisure & Hospitality • Administration

Image from GameCity.org [http://gamecity.org/]

The National Videogame Arcade is a unique national centre which is dedicated to history and development of computer and video games. The museum itself contains many rare and original videogames and consoles as well as a Toast Bar which serves a wide array of toast-based snacks.

Over its time, it has also been involved in working in collaboration with Arts Council England, Times Educational Supplement, Wellcome Trust and the British Library to name a few. These projects and collaborations focused on developing the role of videogames in culture and education.

Home of the acclaimed GameCity festival, The National Videogame Arcade in Nottingham, sadly fell into cash flow difficulties earlier this year despite an increase in its footfall. An eleventh hour investment by a director-led consortium, led by director Iain Simons, saved all 40 jobs at the increasingly popular tourist attraction and museum.

The cash flow difficulties led to the destination being taken into administration, Wilson Field’s Andy Wood and Lisa Hogg were appointed as joint administrators on 19^th August 2016.

Andy Wood, an insolvency practitioner at business turnaround and insolvency specialist, Wilson Field, said;

“The investment story behind the consortium is based on the passion that Iain Simons and his staff have for the GameCity project.

“We were appointed as administrators after the company fell into financial difficulties, despite growing in popularity. The consortium of investors could clearly see the potential to turn the business around and with support from the staff, GameCity has a new future.”

Director of GameCity and investment consortium leader, Iain Simons, was very happy with securing the last minute investment and the service he received from ourselves; “The NVA is like no other facility within the UK and is rapidly growing in popularity. It was devastating to us when we realised that the business was in financial difficulty, but we knew it could be overcome.

“I have to give all credit to the staff here who volunteered to work without pay when we announced that the business was in trouble and this undoubtedly allowed us the time to pull together a consortium of investors to give the facility a bright new future and secure those jobs.

“GameCity is rapidly picking up pace and the Toast Bar, National Videogame Arcade and our collaborations with new partners in the UK and beyond are proving to be just as popular as we’d hoped.”

For more information on GameCity visit http://gamecity.org and for further information about our insolvency procedures, call us on 0800 901 2475.

Oldham Precision

Kelly Burton • Construction & Engineering • Administration

Machining engineers Oldham Precision has been bought out of administration saving all 12 jobs.

The company’s principal activity was the sub-contracting manufacture of large volume batch precision machined components for clients across a wide range of industries including aerospace, paper converting, printing, coatings, electronics and valve construction.

Administrators Kelly Burton and Lisa Hogg from Sheffield business turnaround experts Wilson Field were appointed joint administrators on 17 January after the company suffered cash flow problems.

Originally established in 1982, the company, based at Red Rose Business Park on Shaw Rd in Royton, offered subcontract engineering including CNC milling, grinding and turning.

After advice from Wilson Field, the business was sold to the existing management team as a going concern saving all 12 employees’ jobs.

Kelly Burton, director in the Leeds office at Wilson Field said;

“Following discussions with the director, the business was sold as a going concern, safeguarding all 12 employees’ jobs and offering a better return for the company’s creditors than alternative options.

“The new company will be under the same management offering the same standards of service to its customers.”

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