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Which TWO of the following statements describe the effect of an administration order?
A. Past transactions of the company may not be challenged
B. No creditor can appoint a receiver
C. The administrator acts as agent for the company as a whole, including the creditors
D. The administrator can sell assets which are subject to a fixed or floating charge to raise money for the companyI chose B and D but the model answer suggests B and C.
For C, isn’t the adminstrator the agent of the company only? While the administrator needs to treat creditors fairly and in their best interest but is not legally their agent.
For D, the administrator can generally do so after obtaining court permission or chargeholders’ consent.Please help me clarifying this,
Thank you.We are agreed on A and D! So it’s just B and C that we neem to consider.
A creditor may appoint, but only with the sanction of the court.
For option C the administrator is the agent of the company but they also have legal responsibilities to the creditors (FYI they are also an officer of the Court!)
Do you want chapter and verse references?
OK
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