41-715: The Competition Appeal Tribunal ( CAT ) of the United Kingdom was created by Section 12 and Schedule 2 to the Enterprise Act 2002 which came into force on 1 April 2003. The Competition Service is an executive non-departmental public body which was created as a support body for the Competition Appeal Tribunal. The current functions of the CAT are: As of January 2024, the tribunal has addressed 623 cases to date. Examples include: In 2011,
82-537: A legal concept, administration is a procedure under the insolvency laws of a number of common law jurisdictions, similar to bankruptcy in the United States . It functions as a rescue mechanism for insolvent entities and allows them to carry on running their business. The process – in the United Kingdom colloquially called being "under administration" – is an alternative to liquidation or may be
123-405: A " provisional liquidator " to temporarily preserve the company's assets while the winding-up application is pending. Administrators are required to be registered liquidators since they have broad powers to deal with company property. The appointment of an administrator "freezes" any legal proceedings against the company and control of the company is given entirely to the administrator. Directors of
164-413: A "receiver" is appointed by a secured creditor to sell off a company's assets in order to repay the secured debt , or by the court to protect the company's assets or carry out other tasks. Voluntary administration is when the directors of an insolvent company appoint an external administrator to investigate whether winding up the corporation can be prevented or delayed and to make recommendations to
205-419: A deal to sell its assets to a buyer before appointing administrators to facilitate the sale. It is a legal way of selling the business on to a trade buyer or third party. A pre-pack is the process of selling the assets of a company immediately after it has entered administration. It is sometimes the case that the previous directors or management purchase the assets of the company from the administrator and set up
246-490: A debtor who has enough money left over after priority creditors and essential expenses may be able to arrange an individual voluntary arrangement. (Debtors with less serious problems may prefer a debt management plan .) The Republic of Ireland operates a similar process called examinership , but companies require permission from the High Court to enter and leave examinership. In New Zealand , voluntary administration
287-451: A floating charge created prior to 15 September 2003 retain their right to appoint an administrative receiver, but all purported rights to do so created after that date will be construed as rights to appoint an administrator, subject to certain specific, rare exceptions. A court order is issued that forbids any form of legal or insolvency action without the court's permission. An application to the court for an administration order may be made by
328-570: A market should be the basis for investigation. The Act had five major competition policy objectives; Make all competition decisions through independent bodies, root out forms of anti-competitive behaviour, create a strong deterrent effect, to redress injured parties in distortions of competition and raise the profile of competition policy in the UK. The act made the Office of Fair Trading formally independent from government, and gave it additional powers. It
369-605: A more flexible regime is available under the Companies' Creditors Arrangements Act ("CCAA"). In UK law, the administration regime is governed by the Insolvency Act 1986 , as amended by the Enterprise Act 2002 . An "administrator" can be appointed without petitioning the court by the holder of a floating charge (created since 15 September 2003), by the company or by its directors. Other creditors must petition
410-461: A new company. This process has advantages in that it enables the administrator to realise a greater amount for the assets due to business continuity and that the goodwill of the company is preserved. The employees of the company are also usually transferred to the new company, preserving jobs. Pre-packs have attracted criticism because of the appearance it gives to unconnected parties that the company has just continued without its creditors. SIP 16
451-529: A number of fines levied by the Office of Fair Trading (OFT) on construction firms found to have engaged in illegal bid-rigging schemes were deemed to be "excessive" and the Tribunal revised the values of the fines. The tribunal decided that the OFT had used turnover figures for the wrong year when calculating fines, and treated the bid-rigging as more serious than it should have done, although in some other respects
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#1732772986856492-622: A period of between 2 and 3 years, but now the majority of bankruptcies will be discharged after only 12 months. The law was changed to give those with genuine cases of financial hardship the opportunity to be free of their indebtedness. For those who have tried, unsuccessfully, to resolve their financial difficulties, the new laws allow them to petition for their own bankruptcy and start again. Additional changes also mean that there are harsher restrictions for those who have previously been made bankrupt and those who have been through criminal bankruptcy. Individuals previously an undischarged bankrupt during
533-424: A precursor to it. Administration is commenced by an administration order . A company in administrative receivership is operated by an administrator (as interim chief executive with custodial responsibility for the company's assets and obligations) on behalf of its creditors . The administrator may recapitalize the business, sell the business to new owners, or demerge it into elements that can be sold and close
574-469: A probe over pricing of hotel rooms sold online. The OFT's decision had been to accept commitments from a number of online travel agents and InterContinental Hotels Group (IHG). Skyscanner appealed against the OFT's successor, the Competition and Markets Authority, because it believed its business would be affected by the settlement, even though it was not targeted by the investigation. Skyscanner's case
615-472: Is a stub . You can help Misplaced Pages by expanding it . Enterprise Act 2002 The Enterprise Act 2002 (c. 40) is an act of the Parliament of the United Kingdom which made major changes to UK competition law with respect to mergers and also changed the law governing insolvency bankruptcy . It made cartels illegal with a maximum prison sentence of 5 years and states that level of competition in
656-410: Is a process designed to protect limited companies from their creditors while a debt restructuring plan is carried out and presented to creditors and courts. This administration order process requires a licensed insolvency practitioner to act as the administrator appointed by the court. The administration order does not concern joint debt. Pre pack is an insolvency procedure where a company arranges
697-404: Is an independent person that is formally appointed to control an insolvent company's affairs. External administrators can be appointed either by the company's directors, a secured creditor , or by a court, and include: provisional liquidators , liquidators , voluntary administrators, deed administrators , controllers , and receivers . A receivership is when an external administrator known as
738-407: Is an officer of the court and an agent of the company, and is not personally liable for any contracts they make on behalf of the company. They have the power to do anything necessary or expedient for the management of the affairs, business and property of the company. The new administration regime introduced by the Enterprise Act 2002 replaces the previous situation where administrative receivership
779-523: Is covered by the Companies Act 1993 , as amended under the Companies (Voluntary Administration) Regulations Bill in 2007. In Ukraine, a system of "sanation" ( Ukrainian : санація ) measures take place to prevent or lessen the effect of insolvency. The basic components of those measures include providing special loans and subsidies; exemptions for issuing a credit or taxation; restructuring of
820-656: Is now possible for searches to be carried out under warrant from this act of business premises involved with potentially prohibitable mergers. The act also established the Commission Appeals Tribunal (CAT) for companies to appeal against decisions by the Competition Commission . The role of the Director General of Fair Trading (DGFT) was also abolished and his powers given to the OFT, this was seen as an attempt to depersonalize
861-440: Is operating efficiently, with enough freedom of competition between insolvency practitioners and whether consumers and creditors are being treated as fairly as possible. An example of a pre-pack is the sale of the assets of Cobra Beer to Coors immediately after Cobra Beer entered administration. This allowed the brand to continue and saved jobs, but also left suppliers out of pocket by an estimated £75 million. In this process,
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#1732772986856902-634: Is the case, the Official Receiver can apply for a Bankruptcy Restriction Order, which may be applicable for between 2 and 15 years, in addition to the normal length of discharge. Examples of such situations are the failure to produce or retain records, incurring debts as a result of gambling and incurring debts that have arisen as a result of precarious or risky conjecture. Additionally, the usual cost to an individual that wishes to petition for their own bankruptcy has risen from £460 to £510 as of 1 April 2008. Administration (insolvency) As
943-437: The 15 years before the current bankruptcy (unless the previous bankruptcy was annulled) were automatically discharged on 1 April 2009. A bankrupt may ask the court for a discharge 5 years after the date of the bankruptcy order, but the court can refuse or delay the discharge, or grant it conditionally on terms requiring some payments to be made out of the individual'a income. A person can become free from bankruptcy immediately if
984-542: The OFT's ruling was upheld. In December 2020 the tribunal upheld a decision of the Competition and Markets Authority (CMA) on an appeal from Northern Ireland building firm FP McCann Ltd., who along with other companies had participated in an illegal cartel . In March 2014, the price-comparison site, Skyscanner , brought a case to the Tribunal, challenging a January 2014 decision by the Office of Fair Trading to settle
1025-493: The Official Receiver's staff have little experience or training in the litigation involved) must deal with the debtor's main residence. There is no time limit for dealing with other assets or properties. If the Official Receiver fails to realize the property during this time, the property will revest in the (ex-)bankrupt. If it is believed that the debtor has brought about the bankruptcy through its own irresponsible or imprudent conduct, there are now more severe consequences. If this
1066-412: The administration or wind the company up. The DOCA is a binding agreement between a business and its creditors overseen by a deed administrator relating to how the company's assets will be managed to ensure better returns for its creditors than an immediate winding up. When a creditor petitions the court seeking a court liquidation (a court-mandated winding up) of an insolvent company, the court appoints
1107-516: The business's debts and capital; change of organizational and production structure of the debtor; full or partial nationalization; others. Following the dissolution of the Soviet Union and reforming the existing socialist law , in 1999 there was established a law "About restoring the debtor's solvency or declaring him bankrupt". The official who administers "sanation" is known as an "arbitral director" ( Ukrainian : aрбітрaжний керуючий ) and
1148-481: The company are prohibited from acting in their capacity as directors for the duration of the administration, while administrators are personally liable for any debts incurred by the company in the course of the administration. The Bankruptcy and Insolvency Act provides mechanisms for consumer and general proposals in order to give time for an insolvent person to be able to reorganize his affairs. For insolvent companies (or affiliated groups) owing more than $ 5 million,
1189-414: The company, the directors, a creditor or any combination of them. The Enterprise Act 2002 amended the Insolvency Act 1986 to provide an out-of-court process to appoint an administrator to the holder of a floating charge or the company or its directors. This is considerably cheaper and simpler than the previous system, which involved an application to court. In the United Kingdom, an administration order
1230-408: The competition investigation process. The Minister of Trade and Industry in the past played a large role in competition policy, having final say over whether a particular merger was in the public interest. Under the new Act his role was significantly diminished in order to de-politicize competition regulation which had been accused of being inconsistent in the past. He now only has powers to intervene if
1271-417: The court annuls (cancels) the bankruptcy order, which normally happens when the debts (including any fees and expenses of the bankruptcy proceedings) have been paid in full or if the bankruptcy order was made in error. Alternatively, if a person has failed to carry out their responsibilities under the bankruptcy proceedings, the Official Receiver may apply to the court to delay the discharge from bankruptcy. If
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1312-575: The court can be produced at the courts discretion. Administration is analogous to going into " Chapter 11 " in the United States, although there are certain key differences, mainly stemming from the fact that English law does not include the debtor in possession concept. During the reorganisation period, as a result, the administrator usually runs the business rather than the directors, and any additional liquidity requirements effectively have to be met by funds provided by existing creditors rather than by any super-senior ' DIP financing '. The administrator
1353-818: The court is in agreement, the bankruptcy order cannot end unless the suspension has been lifted and the time remaining on the bankruptcy period has run out. There is now a limit of 3 years (either from the date of the Bankruptcy Order or from when the Official Receiver/Trustee first became aware of the Bankrupt's interest in the property), during which the Trustee in Bankruptcy (this may be the Official Receiver but far more likely to be an Insolvency Practitioner, normally an accountant, since
1394-465: The court to appoint an administrator. The administrator must act in the interests of all the creditors and attempt to rescue the company as a going concern . If this proves impossible the administrator must work to maximise the recovery of the creditors as a whole. Only then may the administrator attempt to realise property in favour of one or more secured creditors. A firm is usually in administration for no more than 12 months, after which an extension from
1435-421: The directors and their creditors as to whether the company should enter into a deed of company arrangement, be wound up (i.e. liquidated ), or be returned to the control of the directors. After an administrator is appointed, there are two meetings of creditors, held within tight time-frames, with the second being the most important as it will decide whether to enter into a deed of company arrangement (DOCA), end
1476-434: The proposed merger will affect the media to the detriment of the public, national security or if one of the firms is a government contractor. On the deterrence side of the act, jail terms of a maximum of five years for directors was introduced in order to increase deterrence for forming cartels. The competition commission also had its scope widened to cover investigations of whole industries, not just specific firm, for example
1517-500: The remainder. Most countries distinguish between voluntary (board-decided) and involuntary (court-decided) receivership. In voluntary administrative receivership, the administrator is appointed by the company directors. In involuntary administrative receivership, the administrator is appointed by a judicial court. The legal terms for these processes vary from country to country, and the processes may overlap. In Australia, an external administrator, also called an insolvency practitioner ,
1558-538: The supermarket industry. The Enterprise Act made substantial amendments to the administration procedures for failing companies. The purpose was to enhance the policy of creating a "rescue culture", so that insolvent companies so far as possible should be saved, before their assets are stripped and distributed to creditors. Since 1 April 2004, there have been considerable changes to the laws concerning bankruptcy in England . Previously, bankruptcy would typically last for
1599-421: Was available as an alternative to administration, which has traditionally been a more rescue-oriented insolvency regime. This regime allowed the holder of a floating charge to appoint an administrative receiver to realise assets in his favour, and also to block an administration order sought by a borrower. This was felt to be too favourable to the floating charge holder at the expense of other creditors. Holders of
1640-458: Was introduced in January 2009 to assist Insolvency Practitioners in pre-pack cases. It was designed to make the process more transparent for creditors, and to ensure that fair value was obtained for the assets. In November 2009, the Office of Fair Trading announced a study into corporate insolvencies, with particular focus on pre-pack administrations, to report on whether the insolvency market
1681-549: Was supported by a smaller online travel agent, Skoosh, which had triggered the OFT's original investigation. In a judgment handed down in September 2014, the Competition Appeal Tribunal quashed the Office of Fair Trading's decision to accept commitments in the online hotel booking sector and the matter was reverted to the CMA for reconsideration. This article relating to law in the United Kingdom , or its constituent jurisdictions,