Administration Order
An order made in a County Court to arrange and administer the payment of debts by an individual; or an Order made by a Court in respect of a company that appoints an Administrator to take control of the company. The company can also be put into Administration if a floating charge holder, or the Directors of the company itself apply for the requisite notice of Court.
Administrator or Receiver
An IP (Insolvency Practitioner) appointed by the holder of a debenture (bond) that is secured by a floating charge that covers the whole or substantially the whole of the company’s assets. The IP’s task is to realise those assets on behalf of the debenture holder.
Administrative Receivership
The process where an IP is appointed by debenture holder (lender) to realise a company’s assets and pay preferential creditors and the debenture holder’s debt. The right of a debenture holder to appoint an Administrative Receiver has been restricted by the Enterprise Act 2002.
Administrator
An IP appointed by the Court under the Administration Order or by a floating charge holder or by the Company or it’s Directors filing a Requisition Notice at Court.
Annulment
Cancellation.
Assets
Anything that belongs to the debtor that may be used to pay his/her debt.
Bankruptcy restrictions order or undertaking
A procedure was introduced on 1 April 2004 whereby a Bankrupt who was being dishonest or in some way to blame for their bankruptcy may have a Court Order made against them or give an undertaking to the Secretary of State which will.
Charge
Security interest taken over property by a creditor to protect against non payment of debt (such as a mortgage).
Company Directors Disqualification Act 1986
An Act of Parliament… the disqualification of Directors.
Compulsory Liquidation
Winding up of a company after a petition to the Court, usually be a Creditor.
Contributory
Every person liable to contribute to the assets of a company if it is wound up. In most cases this means shareholders who have not paid for the shares in full.
Creditor
Someone owed money by a bankrupt or company.
Debenture
A document in writing, usually under seal issued as evidence of a debt or the granting of security for a loan of a fixed sum at interest (or both). The term is often used in relation to loans (usually from Banks) secured by charges, including floating charges, over company’s assets.
Director
Person who conducts the affairs of a company.
Disqualification
The procedure whereby a person has a Court Order made against them or gives an undertaking to the Secretary of State which makes it an offence for that person to be involved in the management or directorship of that company for the period specified in the Order (unless leave has been granted by the Court).
Dividend
Any sum distributed to unsecured creditors in an insolvency.
Fixed charge
A charge held over specific assets. A debtor cannot sell the assets without the consent of the secured creditor or repaying the amount secured by the charge
Guarantee
An agreement to pay the debt owed by a third party. There must be evidence in writing for it to be enforceable.
Liquidation (winding up)
Applies to companies or partnerships. It involves the realisation and distribution of the assets and usually the closing down of the business. There are 3 types of Liquidation: Compulsory, Creditors Voluntary and Members Voluntary.
Liquidator
The Official Receiver or an IP appointed to administrate the liquidation of a company or partnership.
Member (of a company)
A person who has agreed to be, and is registered as, a member, such as a shareholder, of a limited company.
Nominee
An IP who carries out preparatory work for a voluntary arrangement prior to its implementation.
Officer (of a company)
A Director, Secretary or Manager of a company.
Official Receiver
An Officer of the Court and Civil Servant employed by the Insolvency Service who deals with bankruptcies and compulsory company liquidations.
Person
An individual or corporation.
Petition
A formal application made to a Court.
Preferential creditor
A creditor who is entitled to receive certain payments in priority to floating charge holders and other unsecured creditors. These creditors include occupational pension schemes and employees.
Proof of Debt
A statutory form completed by a creditor in a compulsory Liquidation to state how much is claimed. The Liquidator supplies the form.
Provisional Liquidator
OR/IP appointed to preserve the company’s assets pending the hearing of a winding up petition.
Proxy
Instead of attending a meeting, an individual can appoint someone to vote in their place – a proxy.
Proxy form
A form that must be completed if a creditor wishes someone else to represent him/her at a creditors meeting and vote on their behalf.
Public examination
When a company is being wound up or in bankruptcy proceedings, the Official Receiver may at any time apply to the Court to... Director(s) or any other person who has taken part in the promotion, formation or management of the company or bankrupt.
Realise
Realising an asset means selling or disposing it to raise money, for example, to sell an insolvent’s assets and obtain the proceeds.
Receiver
Commonly used name for Administrative Receiver. The term can also mean a person appointed by the Court or with the power to receive the rent, profits or property. Receivers who are not Administrative Receivers do not need to be IP’s.
Receivership
A company in Administrative Receivership is often said to “in Receivership”. A procedure that cancels a winding up order.
Release
A process by which the OR or IP who is discharged from the liabilities of office as Trustee/Liquidator or Administrator.
Secretary of State
The Secretary of State for the Department of Trade and Industry.
Secured Creditor
A creditor who holds security such as a mortgage over a person’s assets or money owed.
Shadow Director
A person who, without being formally appointed, gives instructions on which the directors of the company are accustomed to act.
Statement of Affairs
A document sworn under oath completed by a bankrupt, company officer or director(s) stating the assets and giving details of debts and creditors.
Supervisor
An IP appointed to supervise the carrying out of a company in a Voluntary Arrangement.
UNCITL
United National Commissions on International Trade and Law.
Unsecured Creditor
A creditor who does not hold security (such as a mortgage) or money owed. Some unsecured creditors may also be preferential creditors.
Voluntary Liquidation
A method of Liquidation not involving the Courts or the Official Receiver. There are two types of Voluntary Liquidation: Members Voluntary Liquidation for Solvent Companies and Creditors Voluntary Liquidation for insolvent companies.
Winding up Order
An Order of a Court usually based upon a Creditors Petition for the compulsory winding up or Liquidation of a company or partnership.
