Copy of `Cranfield - Business recovery index`

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Cranfield - Business recovery index
Category: Economy and Finance > Business Recovery
Date & country: 19/11/2007, UK
Words: 25

An administration order is usually sought through a petition by a company that is insolvent, or is likely to become so. This procedure places the company under the control of a licensed insolvency practitioner and the protection of the court to achieve one (or more) specified statutory purposes. The aim is to save the business or achieve a better r…

Administrative Receiver
A licensed insolvency practitioner appointed by the holder of a floating charge, created before 15th September 2003, covering the whole, or substantially the whole, of a company`s property. An administrative receiver can carry on the company`s business and sell the business and other assets subject to the floating charge to repay the secured credit…

Administrative Receivership
An administrative receiver is appointed by a bank or other lending institution, which holds the majority of a company`s assets as security against lending under a floating charge debenture.

An administrator is a licensed insolvency practitioner appointed in respect of an administration to achieve the statutory purpose. The administrator will need to produce a plan for approval by the creditors to achieve this.

A bankrupt is an individual against whom a bankruptcy order has been made by the court. The order shows that the bankrupt is unable to pay his/her debts and deprives him/her of property, which is then realised for distribution amongst the creditors of the bankrupt.

In bankruptcy, the court is officially responsible for making a bankruptcy order against an individual. This is on the petition of a creditor on the grounds of insolvency, the individual themselves, by the supervisor of a failed individual voluntary arrangement or by the Secretary of State.

Bankruptcy Order
An order of the court, following the petition of a creditor or the debtor him/herself or a supervisor of a failed individual voluntary arrangement on the grounds of insolvency or by the Secretary of State.

Company Voluntary Arrangement (CVA)
Company voluntary arrangements involve the planning of corporate reorganisation, sometimes involving delayed or reduced payments of debt, capital restructuring or an orderly disposal of assets. The CVA is proposed to creditors and shareholders at creditors` and shareholders` meetings. There is limited court involvement and the scheme is supervised …

Compulsory Liquidation
A compulsory liquidation (also called a compulsory winding-up) is a liquidation ordered by the court. This is usually on the petition of a creditor, company, director(s) or shareholder(s). A winding-up petition may also be presented by the Secretary of State for Trade and Industry on the grounds of public interest.

A document setting out the terms of a loan, usually to a company. A debenture may be secured on part or all of a company`s assets and often comprises of a fixed charge and a floating charge. The lender is referred to as the debenture holder and is a secured creditor.

Fixed Charge
A fixed charge is a form of security granted over specific assets, preventing a company or individual dealing with those assets without the consent of the secured creditor. It gives the secured creditor a first claim to the proceeds of sale of the assets over which the charge falls and the creditor can usually appoint a receiver to realise the asse…

Floating Charge
A floating charge is a form of security over general assets of a company which can change from time to time as part of the normal activity of a business. The company continues to use the assets until a default event occurs. If this happens, the secured creditor will usually appoint an administrative receiver to realise the assets to recover the deb…

Going Concern
A basis on which a licensed insolvency practitioner will sell a business. Effectively it means the business continues, jobs are saved, and a higher price is obtained.

Licensed Insolvency Practitioner
A person licensed by one of the Chartered accountancy bodies, the Law Societies, the Insolvency Practitioners Association or the Department of Trade and Industry. This is the only person who may act as an office holder in insolvency proceedings.

A licensed insolvency practitioner appointed to wind-up a company.

A licensed insolvency practitioner appointed by a company or an individual to formally advise during the period leading up to the holding of the creditors meeting to approve the terms for a company voluntary arrangement or an individual voluntary arrangement.

Official Receiver
An officer of the court who is a civil servant and a member of the Department of Trade and Industry Insolvency Service. He or she deals with bankruptcies and compulsory liquidations.

Preferential Creditor
A class of creditor who benefits from a statutory priority over floating charge and unsecured creditors. Preferential creditors are predominantly employees of the company or of an individual. Prior to 15th September 2003, the Inland Revenue, HM Customs & Excise and the DSS enjoyed preferential status in respect of certain claims.

An individual appointed by a secured creditor under the terms of a mortgage or depenture in respect of specific assets of a company or individual. A receiver need not be a licensed insolvency practitioner.

Secured Creditor
A class of creditor who benefits from holding security over part or all of a company`s or individual`s assets.

A licensed insolvency practitioner appointed by creditors in an individual voluntary arrangement to implement the terms of the IVA as approved by creditors.

A licensed insolvency practitioner appointed to administer the estate of a bankrupt.

Unsecured Creditor
A creditor who does not hold security and who has no preferential rights. An unsecured creditor ranks last in the queue of creditors but ahead of shareholders.

Winding-up Order
This is an Order made by the court for a company to be placed in compulsory liquidation.

Winding-up Petition
A winding-up petition is a petition presented to the court seeking an order that a company be put into compulsory liquidation