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35-597: InLink Limited, the company set up to install and manage InLinkUK's WiFi kiosks, together with BT, Intersection and advertising firm Primesight, entered administration in 2019, casting doubt over the future of the project. To resolve the problem, BT purchased the part of the InLink network that they did not already own, and re-branded the kiosks as "Street Hubs", and in 2021 launched the next, improved version. In 2015, BT Group sought an advertising partner to maintain advertisements situated in its 17,500 telephone booths across

70-545: A company director. An administrator's further duties allow a broad scope for the administrator to exercise good business judgment . An administrator is subject to a duty to perform her functions as 'quickly and efficiently as is reasonably practicable', and must also not act so as to 'unfairly harm' a creditor's interests. In Re Charnley Davies Ltd (No 2) the administrator sold the insolvent company's business at an allegedly undervalued price, which creditors alleged breached his duty to not unfairly harm them. Millett J held

105-420: 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 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

140-469: A plan gets foisted on creditors without much time for consideration that works most in favour of the people who ran the company or the large secured lender. In Re Kayley Vending Ltd , which concerned an in-court appointed administrator, HH Judge Cooke held that a court will ensure that applicants for a prepack administration provide enough information for a court to conclude that the scheme is not being used to disadvantage unsecured creditors. Moreover, while

175-532: A set of banks who wanted to repossess them. Nicholls LJ, in outlining the considerations for giving leave to execute repossession, held that leave should be given if it would not impede the administration's purpose, and while the banks were bound to apply for permission, discretion was exercised in their favour. The moratorium is effective for a default, but extendable, period of one year. Just as for directors' duties in UK company law , an administrator owes its duties to

210-523: 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 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

245-472: A web browser. In the UK there have been complaints that the free phone service is being exploited by drug dealers. Administration in United Kingdom law Administration in United Kingdom law is the main kind of procedure in UK insolvency law when a company is unable to pay its debts. The management of the company is usually replaced by an insolvency practitioner whose statutory duty

280-441: A whole. There is some tension, however, between the duties on paper, and the administrator being appointed in fact by secured creditors, or through a pre-packaged insolvency. Once in place, the first task of an administrator is to design a restructuring proposal. This should be given to the registrar and unsecured creditors within 8 weeks, followed by a creditor vote to approve the plans by simple majority. If creditors do not approve

315-407: Is appointed, they will replace the directors. Under paragraph 40, creditors are precluded by a statutory moratorium from bringing enforcement procedures to recover their debts, including a bar on secured creditors taking and or selling assets subject to security with leave of the court. The moratorium is fundamental to keeping the business's assets intact and giving the company a "breathing space" for

350-419: Is expedient "the fewer applications which need to be made to the court the better." This wide discretion of the administrator to manage the company is reflected also in paragraph 3(3)-(4), whereby the administrator may choose between which result (whether saving the company, selling the business, or winding down) "he thinks" subjectively is most appropriate. This places an administrator in an analogous position to

385-487: Is to rescue the company, save the business, or get the best result possible. While creditors with a security interest over all a company's assets could control the procedure previously through receivership , the Enterprise Act 2002 made administration the main procedure. The Insolvency Act 1986 , Schedule B1 contains the procedure for a company entering administration, as updated by the Enterprise Act 2002 . It

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420-553: 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 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

455-437: 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

490-695: 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 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

525-607: The Link will display digital advertisements. The Links feature a tablet, two USB charging ports, and a phone providing free calling to UK numbers. Devices can access the Links' network without time or access limits. Each Link's tablet will provide basic functionality, such as maps and access to emergency services. While LinkNYC was being rolled out, kiosks ' web browsers were being used to access inappropriate content such as pornography. Amid this concern, LinkUK kiosks' tablets will not have

560-561: 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

595-441: The UK. BT ultimately partnered with Intersection , the owner of LinkNYC, and Primesight, a London-based advertising agency. BT will remove certain telephone booths for the Links and provide the network infrastructure. In return, Intersection and Primesight will display advertising on two dedicated screens on the kiosks. The Links will provide free Wi-Fi access with speeds up to 1 gigabit per second , while displays on both sides of

630-408: 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 the supermarket industry. The Enterprise Act made substantial amendments to the administration procedures for failing companies. The purpose

665-450: The administrator. The court may refuse if the 'particular circumstances of the case' (undefined) suggest otherwise. The effect is that the holder of a qualifying floating charge is in a robust position to have their preferred insolvency practitioner installed. Because an administrator can, since the Enterprise Act 2002 , be appointed out of court, a new practice of pre-packaged administration became increasingly popular, whereby typically

700-405: The business running and employees in their jobs. The potential downside is that because a deal is already agreed among the controlling interested parties (directors, insolvency practitioners and usually the major secured creditor) before broader consultation, unsecured creditors are left behind as the momentum behind the deal carries events forward. The concern in the business community is thus that

735-476: The company directors negotiate with a prospective administrator for the sale of the business to take place immediately after entering administration, and often to the company's former management. The perceived benefits of this practice, originating in the 1980s in the United States, is that a quick sale without hiring lawyers and expending time or business assets through formalities, can be effected to keep

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770-496: The company's directors, or any creditor. But an important change since the Enterprise Act 2002 is that it is also possible for a director and, crucially, the holder of a floating charge over the company's whole property to apply for appointment of an administrator out of court. If a director applies for an out of court appointment, they must give 5 days' notice to any such qualifying floating chargee, who may in turn intervene in court to have their own 'specified person' appointed as

805-449: The company, and to the court. In Oldham v Kyrris it was held that creditors may not sue administrators directly in their own capacity, because the duty is owed to the company. In this case, a former employee of a Burger King franchise with an equitable charge for £270,000 for unpaid wages could not sue the administrator directly, outside the terms of the statutory standard, unless responsibility had been directly assumed to him. While

840-638: The costs of arranging the prepack before entering administration will count for the purpose of administrator's expenses, it is less likely to do so if the business is sold to the former management. Here the sale of a cigarette vending machine business was to the company's competitors, and so the deal was sufficiently "arm's length" to raise no concern. In their conduct of meetings, the Court of Appeal made clear in Revenue and Customs Commissioners v Maxwell that administrators appointed out of court will be scrutinised in

875-417: 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

910-818: 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

945-474: The court may make an order as it sees fit. Until then, the powers of administrator extend under Schedule B1, paragraph 59 to 'anything necessary or expedient for the management of the affairs, business and property of the company'. In Re Transbus International Ltd Lawrence Collins J made the point that the rules on administration were intended to be "a more flexible, cheaper and comparatively informal alternative to liquidation" and so with regard to doing what

980-463: The moratorium is in effect the administrator's core purpose and duty under paragraph 3 is to rescue the company, or if impracticable, typically transfer the business as a going concern, or as a last resort break up the business and distribute proceeds to creditors. This and other duties, found in Schedule B1, paragraph 3, are theoretically meant to be exercised for the benefit of the creditors as

1015-580: The purpose of a restructure, and even extends to a moratorium on the enforcement of criminal proceedings. So in Environmental Agency v Clark , the Court of Appeal held that the Environment Agency needed court approval to bring a prosecution against a polluting company, though in the circumstances leave was granted. In Re Atlantic Computer Systems Ltd (No 1) , the company in administration had sublet computers that were owned by

1050-400: The purpose of administration' meant a test lower than balance of probabilities , and more like whether there was a 'real prospect' of success or a 'good arguable case' for it. So here the company was granted an administration order, which led to its major creditor granting funding to continue four building contracts. When applying to the court, the petitioners for administration may be either

1085-409: The standard of care was not breached, and was the same standard of care as in professional negligence cases of an "ordinary, skilled practitioner". He emphasized that courts should not judge decisions which may turn out sub-optimal with the benefit of hindsight . Here the price was the best possible in the circumstances. Enterprise Act 2002 The Enterprise Act 2002 (c. 40) is an act of

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1120-527: The way they treat unsecured creditors. Here the administrator did not treat the Revenue as having sufficient votes against the company's management buyout proposal, but the court substituted its judgment and stated the number of votes allowed should take account of events all the way in the run up to the meeting, including in this case the Revenue's amended claim for unlawful tax deductions to the managers' trust funds and loans to directors. When an administrator

1155-501: 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

1190-587: Was first introduced following the Cork Report 's priorities for transparency, accountability and collectivity and, crucially, fostering a rescue culture for business. In general the conditions for a court to grant an administration order are first, whether the company is insolvent, or 'is or is likely to become unable to pay its debts'. Second, it has to be shown that one of the purposes of administration in paragraph 3 will be achieved. In Re Harris Simons Construction Ltd Hoffmann J held that 'likely to achieve

1225-514: 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 a period of between 2 and 3 years, but now the majority of bankruptcies will be discharged after only 12 months. The law

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