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EG 13.5 1Petitions for administration orders or compulsory winding up orders: determining which insolvency order to seek

EG 13.5.1

1An administration order can be made only in relation to companies and partnerships and only where the court believes that making such an order will achieve one or more of the four purposes set out in section 8 of the 1986 Act. The FCA will apply for an administration order only where it considers that doing so will meet or is likely to meet one or more of these purposes.

EG 13.5.2

1Where it has the option of applying for either an administration order or a compulsory winding up order, the FCA will have regard to the purpose to be achieved by the insolvency procedure.

EG 13.5.3

1In addition, the FCA will consider, where relevant, factors including:

  1. (1)

    the extent to which the financial difficulties are, or are likely to be attributable to the management of the company or partnership, or to external factors, for example, market forces;

  2. (2)

    the extent to which it appears to the FCA that the company or partnership may, through an administrator, be able to trade its way out of its financial difficulties;

  3. (3)

    the extent to which the company or partnership can lawfully and viably continue to carry on regulated activities through an administrator;

  4. (4)

    the extent to which the sale of the business in whole or in part as a going concern is likely to be achievable;

  5. (5)

    the complexity of the business of the company or partnership;

  6. (6)

    whether recourse to one regime or another is likely to result in delays in redress to consumers or an additional cost;

  7. (7)

    whether recourse to one regime or another is likely to result in better redress to consumers;

  8. (8)

    the adequacy and reliability of the company or partnership's accounting or administrative records;

  9. (9)

    the extent to which the management of the company or partnership has co- operated with the FCA;

  10. (10)

    in the case of an unauthorised company or partnership carrying on a regulated activity as part of a larger enterprise, the scale and importance of the unauthorised activity in relation to the whole of the company's or partnership's business;

  11. (11)

    the extent to which the management of the company or partnership is likely to cooperate in determining whether one or more of the purposes of an administration order can be met;

  12. (12)

    in the case of an unauthorised company or partnership carrying on a regulated activity as part of a larger enterprise, the extent to which the company's or partnership's survival can be anticipated without the continuance of the unauthorised regulated activity;

  13. (13)

    where an administrative receiver is in place, whether the debenture holder is likely to agree to an application for an administration order;

  14. (14)

    where an administrative receiver is in place, whether the FCA has reason to believe that the debenture under which the administrative receiver has been appointed is likely to be released, discharged, avoided or challenged.