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Director of Merricks Media Ltd

Company Administration is useful where:

• Cash-flow pressures are intense but there is still an underlying good business to preserve.
• Creditors are unwilling to agree commercial settlement out of court.
• Agreement is not possible within a manageable time-scale. For example creditors are pursuing the company through legal process that threatens to close the company down prematurely.
• The company is insolvent (either on a balance sheet basis or a cash flow basis) and the directors are concerned about the risks of wrongful trading.

In these circumstances it may be advisable to place the company in Administration.

Administration creates a legal stay against creditor action, whilst also providing a breathing space for developing further proposals that can be put to creditors. Under the Enterprise Act 2002, which came into effect on 15th September 2003, this process has been considerably streamlined and no longer requires petitions, independent reports and a court order - it may now merely require initial filing in Court.

The purposes of the Administration must be met and if the company is solvent, it can exit from Administration and revert to the executive control of its own management.