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40-701: Ethel Austin was an English clothing retailer. At its commercial peak it operated around three hundred stores. The company was purchased from the founding family in June 2002, the company ceased operation in January 2013, after numerous times entering administration . The company was founded in 1934 by Ethel Austin, in the front room of her terraced house in Liverpool , helping neighbours with their knitting. This proved so successful, that within five years of going into business, she had opened three shops. The business became

80-427: A court, and include: provisional liquidators , liquidators , voluntary administrators, deed administrators , controllers , and receivers . A receivership is when an external administrator known as 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

120-446: A creditor petitions the court seeking a court liquidation (a court-mandated winding up) of an insolvent company, the court appoints 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

160-419: 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

200-490: 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

240-451: 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

280-400: 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 , 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

320-605: 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

360-461: 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

400-707: A new store in Runcorn was announced. A clearance store also opened in Units 15 to 16a in Liverpool City Centre L1 1QE in 2016. Administration (law) As 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

440-508: A right to levy against a particular piece of property, or against the debtor's accounts in general, the rules governing creditors' rights determine which creditor has the strongest right to any particular relief. Generally, creditors can be divided between those who " perfected " their interest by establishing an appropriate public record of the debt and any property claimed as collateral for it, and those who have not. Creditors may also be classed according to whether they are "in possession" of

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480-468: A subsidiary of Great American Group, acquired the debt of Ashloch and operated the stores while the company was in administration. On 30 July 2012, Liric, a firm controlled by the clothing entrepreneur Mike Basso, acquired 32 of the Ethel Austin stores from GA Europe. On 11 January 2013, the company declared insolvency, and closed all of the remaining stores closed with immediate effect. In May 2015,

520-531: A well known and established chain in the North West and North Wales throughout the mid to late twentieth century. Ethel Austin herself died in January 1989, at the age of 88. In June 2002, the Austin family sold the business to a management team backed by Lloyds Development Capital (LDC) for £55 million. In June 2004, two years later, ABN-AMRO Capital bought the business for £122.5 million. In May 2007, it

560-410: 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

600-407: 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

640-420: Is appointed by a court. Creditors Creditors can be broadly divided into two categories: secured and unsecured . The term creditor is frequently used in the financial world, especially in reference to short-term loans , long-term bonds , and mortgage loans . In law, a person who has a money judgment entered in their favor by a court is called a judgment creditor . The term creditor derives from

680-485: 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 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

720-523: 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

760-440: 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,

800-406: Is this: Creditors' rights are the procedural provisions designed to protect the ability of creditors—persons who are owed money—to collect the money that they are owed. These provisions vary from one jurisdiction to another, and may include the ability of a creditor to put a lien on a debtor's property, to effect a seizure and forced sale of the debtor's property, to effect a garnishment of

840-404: 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 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

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880-499: The United Kingdom colloquially called being "under administration" – is an alternative to liquidation or may be 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

920-477: The Insolvency Practitioner and readily accept annual reports when submitted. Under the Companies Act 2006 , a company's creditors may apply to the court for an order summoning a meeting of the creditors or some of the creditors who fall into a specific category, in order to consider a compromise or " arrangement " between the company and its creditors. If a majority representing 75% in value of

960-500: The area of creditor's rights perform one or all of the following: In the UK, once an Individual Voluntary Arrangement (IVA) has been applied for, and is in place through the courts, creditors are prevented from making direct contact under the terms of the IVA. All ongoing correspondence of an IVA must first go through the appointed Insolvency Practitioner . The creditors will begin to deal with

1000-516: 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

1040-404: The business, sell the business to new owners, or demerge it into elements that can be sold and close 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

1080-447: The collateral, and by whether the debt was created as a purchase money security interest . A creditor may generally ask a court to set aside a fraudulent conveyance designed to move the debtor's property or funds out of their reach. Some lawyers have a specialized practice area focused on the collection of such debts . Such attorneys are frequently referred to as collection attorneys or collection lawyers. Attorneys who practice in

1120-573: The company and control of the company is given entirely to the administrator. Directors of 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,

1160-558: The company and the sixty two remaining stores of Ethel Austin, saving over four hundred jobs. However, Ashloch was forced into administration managed by Duff & Phelps on 11 July 2012, after a landlord of a store in Manchester called in bailiffs after an unpaid rent bill, jeopardising the future of the company. Also in July, the brand was bought by Ricli Limited, owned by Liric owner Mike Basso. The restructuring specialist GA Europe,

1200-478: 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

1240-575: 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

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1280-465: 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

1320-455: The creditors or class of creditors present and voting either in person or by proxy at the meeting agree a compromise, the meeting may apply to the court for the compromise to be enforced. The same provision would apply to members ( shareholders ) of a company seeking to make an arrangement with the company. The Corporate Insolvency and Governance Act 2020 makes similar provision where a compromise has been proposed between creditors or members and

1360-443: The debtor's wages, and to have certain purchases or gifts made by the debtor set aside as fraudulent conveyances . The rights of a particular creditor usually depend in part on the reason for which the debt is owed, and the terms of any writing memorializing the debt. Creditors' rights deal not only with the rights of creditors against the debtor, but also with the rights of creditors against one another. Where multiple creditors claim

1400-423: The notion of credit . Also, in modern America, credit refers to a rating which indicates the likelihood a borrower will pay back their loan . In earlier times, credit also referred to reputation or trustworthiness . In accounting presentation, creditors are to be broken down into 'amounts falling due within one year' or 'amounts falling due after more than one year'... The financial statements presentation

1440-602: Was announced that the company had won the contract to supply uniforms for the event of Liverpool - European City of Culture 2008 . In November 2007, the company ran new adverts on television, which used the BodyRockers song " I Like the Way (You Move) ". At this point, the company had over three hundred stores. On 15 April 2008, Ethel Austin Ltd entered administration, managed by Menzies Corporate Restructuring. The following day, it

1480-496: Was announced that thirty three stores would be closed within three weeks, with job losses totalling 275, with an additional 181 employees made redundant at the company head office and distribution centre at Knowsley, Merseyside . On 19 May 2008, it was reported that Elaine McPherson, former boss of clothing chain MK One , had bought the company for an undisclosed sum, promising to return it to its 'former glory'. On 8 February 2010, it

1520-421: 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

1560-455: 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

1600-502: Was reported that the chain had gone into administration again. On 10 February 2010, administrators announced that there would be job cuts over 496 in the company's head office and distribution depot. It was anticipated that there would also be store closures totalling 196, resulting in further job losses. On 19 August 2011, it was revealed that Ashloch Ltd, founded by the London based former Blackwell's director Sue Townsend, had purchased

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