What is Going Into Administration? A Guide for Directors And The Public
The content on this page has been written by Keith Steven and approved by Chris Ferguson Licensed Insolvency Practitioner and Managing Director of RMT KSA
ReadA guide for redundant employees in administration or insolvency situations
What is Going Into Administration? A Guide for Directors And The Public
PetroFac in Administration Threat
It has been reported that Petrofac, the oil company, has filed an intention to appoint administrators at the court today. Teneo have been lined up to try and rescue the company, the move puts 2000 jobs at risk.In a statement to the stock exchange early Monday, the company said it had applied to the High Court of England and Wales to appoint administrators to its ultimate holding company.“This action is a targeted administration of the holding company only, while the group’s operations will continue to trade,” it said.It appears that the UK operations of Petrofac are financially viable but the problems stem from its Abu Dhabi Operations where there has been a huge financial mess.A rescue deal collapsed last week when a major Dutch customer pulled out of a multibillion contract for wind farms and off shore drilling platformsA spokesperson for the Department for Energy Security and Net Zero said: “The UK arm of Petrofac has not entered administration and is continuing to operate as normal, as an in-demand business with a highly skilled workforce and many successful contracts.“Petrofac’s administration is a product of longstanding issues in their global business. The Government will continue to work with the UK company as it focuses on its long-term future. Ministers are working across all parts of government led by DESNZ in support of this.”The firm, which has UK offices in Aberdeen, London, Woking and Greater Yarmouth, said further information on the administration process would be provided in due course.Given the strong performance of the UK arm of the business it is likely that Petrofac UK will be sold to another operator.
ReadSheffield Wednesday To Go Into Administration
Sheffield Wednesday is to go into administration according to reports. A notice was filed with the Insolvency and Companies Court at the High Court on Friday morning and Julian Pitts, Kris Wigfield and Paul Stanley of Begbies Traynor have been appointed joint-administrators. Staff have been briefed, while administrators also held a meeting with players.The Owls are one of the oldest clubs in the world, having been founded in 1867. This follows the winding up petition that was served on the club last week by HMRC. HMRC are owed £1m.The administration will result in the club being deducted 12 points and almost certain relegation.The fans have been very angry with the clubs performance and have even boycotted home games. It has also been reported that player's wages have not been paid on time.
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Pizza Hut Goes Into Administration According To Reports
TheBusinessDesk.com has reported that Pizza Hut has gone into administration less than a year after a rescue plan.FTI has been appointed as administrators by DC London Pie Ltd, the business established to manage Pizza Hut UK following a pre-pack agreement. Six weeks after HMRC filed a winding-up petition against the company, the action was taken.Yum! III (UK) Limited, the applicant for today's filing, is a division of Yum! Brands, Inc., an American food outlet operator based in Louisville, Kentucky, which is in control of the company.Last year, 3,000 jobs were spared when Directional Capital, which controlled franchises in Sweden and Denmark, purchased the 139 restaurants in a pre-pack deal.Investor Pricoa Capital, which had supported a management buyout, was owed over £40 million when Pizza Hut UK's former owner, Heart with Smart Limited, went bust.Pizza Hut is to close 68 restaurants and 11 delivery sites with the loss of 1,210 jobs after falling into administration.However, Pizza Hut's global owner Yum! Brands has agreed to save 64 restaurants in the UK, preserving 1,276 jobs.
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Northumberland firm Merit files Notice of Intention to Appoint Administrators
The Northumberland Gazette has reported that A Cramlington-based construction company has taken action to “protect the position of the business” after a winding-up petition from HM Revenue and Customs (HMRC).Merit Group Services Limited has filed a Notice of Intention to Appoint Administrators, saying the petition caused project delays and “significant additional pressure” on cashflow, though it remains “confident that a solution to this difficult situation can be found.”The company heads a group of 16, including Merit Holdings, which is working with Northumbria Healthcare NHS Foundation Trust on the £35m Berwick Community Hospital and a medicines manufacturing unit at Seaton Delaval. Some of the hospital units have been built at Merit’s Cramlington site and transported to Berwick for installation.A Merit spokesperson said: “The recent filing of a winding up petition against Merit Group Services resulted in certain customer projects experiencing delays, which in turn has placed significant additional pressure on the group’s cashflow.“We have therefore taken the decision to file a Notice of Intention to Appoint Administrators in order to protect the position of the business while we explore options. We remain confident that a solution to this difficult situation can be found.”HMRC has not disclosed its reasons for the petition, saying such action is only taken “once we’ve exhausted all other options.”A trust spokesperson said: “Northumbria Healthcare has been made aware that Merit has filed a notice of intention to appoint an administrator. This is a very unfortunate situation and we appreciate that this will be a very difficult time for all involved.“The trust is continuing to work in partnership with the organisation and its advisers, and has adhered to the contractual agreements in place.“We have robust plans in place to ensure construction work continues to progress both the Berwick Community Hospital and Medicines Manufacturing Centre at Seaton Delaval.“We remain focused on delivering both projects as planned and are in on-going dialogue with all relevant parties to ensure continuity and minimise any potential disruption.”Construction businesses have the highest insolvency rates in part due to the "lumpy" nature of their income, complex contracts and unforseen construction problems.See how RMT KSA has saved construction companies using our innovative turnaround techniques. We also have an office in Berwick!
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PPE Medpro in Administration Move
PPE Medpro Limited, linked to Michelle Mone and Douglas Barrowman has filed a notice of intention to appoint administrators. This follows the judgement by the High Court today that they must repay the government £122m for supplying non-compliant surgical gowns to the NHS.It should be noted that the intention to appoint administrators is a way of protecting the company from aggressive creditor actions, such as winding up petitions. It gives the company protection for 10 days whilst it tries to rescue the business. This might be additional finance or a sale.However, following the loss of the High Court battle many will ask can the government get its money back. There may be legal appeals, so it may not be the end of the matter. However, if the company does go into administration, which needs to be likely in order to be allowed to file the "intention" then it will be difficult to get money back. The company only has assets of £666k having spent £4.2m on legal fees.The company will be run by the admistrators and most likely put into liquidation very quickly as it cannot trade. The liquidators will then have to go through all the books and records and investigate the conduct of the directors etc. If, and it is a very BIG if, the liquidators find wrongdoing on behalf of the directors then they may be able to claim against the personal wealth of the directors or ex-directors (not Mone or Barrowman as they were never directors). The liquidators would have to PROVE that they were fraudulent and wilfully negligent in the handling of the business/contract. There is or has been NO suggestion that this is the case. The argument centred around the contract and what was agreed that should be supplied.People will be angry that the PPE was not fit (according to the NHS) but that does not mean that it was the directors fault and they should be held liable. This is simply a breach of contract case.It is worth remembering the extraordinary circumstances in which PPE procurement took place. Many companies and individuals came forward in good faith, wanting to help meet urgent demand in the Pandemic. With the pace and pressure of the situation, it was almost inevitable that misunderstandings etc would happen.Here is what Michelle Mone had to say about the case"Today’s judgment against PPE Medpro is shocking but all too predictable. It is nothing less than an Establishment win for the Government in a case that was too big for them to lose. According to the judgment, PPE Medpro won its original pleaded case, having spent 4.5 years and £4.4 million defending it. However, on the opening day of trial, the Government pivoted to an entirely new argument, one that had never been pleaded beforehand. They claimed there was a lack of original “source documentation” around sterilisation, even though seven fully accredited sterilisation plants supplied gowns to other Governments and suppliers worldwide throughout the pandemic, without an issue. This quantum leap of faith on the part of the judge gave the government an overall win. To use a simple analogy, if a car looks, feels, and drives like, say, a Range Rover, then unless you can show how the car is assembled by the manufacturer, it’s not a Range Rover! That’s essentially what the judgment states, which contradicts all the evidence presented in court during the month-long trial in June of this year. I've attached the complete press release from my husband’s spokesperson for your review. It lays bare the injustice of this judgment and the Establishment cover-up behind it."
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Play Airline Goes Into Administration
The budget airline, Play, has gone into administration after cancelling all of its flights from Glasgow Airport.The airline is based in Iceland and has announced that it has "ceased operations"Play only started its flight schedule to Glasgow in 2023, and said they were "deeply sorry" to their customers.In a statement on its website, the airline wrote: “Fly PLAY hf. has ceased operations, and all flights have been cancelled…We kindly advise you to check flights with other airlines.“Some carriers may offer special ‘rescue fares’ considering the circumstances”.The airline continued: “We are deeply sorry for the disruption this causes and thank you for your understanding”.Under refunds and passenger rights, the airline has stated that customers who purchased a ticket with a credit card should contact the card issuer for refunds.Many travel insurance policies do not actually cover for airlines going into administration. However, some customers would be protected by their credit or debit cards. Also, those who had a flight with a codeshare partner can claim their cost back via that airline.For any customers who have booked a ticket as part of a package (including flights and accommodation) through a travel agency in the EEA, please contact the travel agent used for assistance.They added: “Some rights may also apply under EU Air Passenger regulations. In case of bankruptcy, claims should be directed to the appointed administrator.”Around 500 staff have lost their jobs.The airline had been in existence for about five years. It follows former Icelandic carriers Primera Air and Wow Air into aviation history.Travellers were able to fly direct to Keflavik to explore Iceland, or connect with Play's four US destinations: New York Stewart, Boston, Baltimore/Washington, Washington Dulles, or Toronto in Canada.
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Claire’s in Administration Threat
It has been reported that Claire's, the fashion accessories chain, has filed an intention to appoint administrators at the court today. Interpath have been lined up to try and rescue the company, the move puts 2,150 jobs at risk.The company has 278 shops in the UK and 28 in Ireland but has been struggling with falling sales and fierce competition. The US arm of the company has already gone into Chapter 11 bankruptcy protection.Claire's said all outlets will continue trading while administrators at Interpath said they will "assess options for the company" once appointed.Mr Cramer, the chief executive, said: “This decision, while difficult, is part of our broader effort to protect the long-term value of Claire’s across all markets.”Mr Wright at Interpath said: “Over the coming weeks, we will endeavour to continue to operate all stores as a going concern for as long as we can, while we assess options for the company.”The UK chain sits as part of the Claire’s empire, which stems from a base in a suburb of Chicago, Illinois.Claire’s French business, which has 239 stores, was forced to call in receivers last month.As such, it isn't really a UK specific problem. The main issue has been that the teenagers and "tweens" who have been the bedrock of Claire's customer base worldwide now buy their "accessories" online, via influencers and from the likes of Temu and Shein.Many retailers have used CVAs to try and reduce costs but in the case of Claire's the problems were probably too deep and the benefit of exiting a few leases or reducing rents was not going to be enough.A loan of £355m is due to be paid back in December 2026 and it is likely that the lenders ( who are secured so not bound by a CVA ) felt that time was up. The last 3 years the company has lost £25m and turnover has fallen to £137m
ReadSimmons Cocktail Bar Group Goes Into Administration
Simmons, the London cocktail chain with 20 venues, has gone into administration after saying that it would close at least four sites as it struggled with increased costs and pressures facing customers. In a statement founder Nick Campbell said “As part of the process, we’ve taken the tough decision to exit four leases, allowing management to focus resources on our strongest performing venues,”. The bar group,has appointed advisory firm Kroll to oversee the administration, company filings show. In its latest audited accounts, the company posted a loss of £749,000 for the year to end March 2024, reversing a profit of just under £2m the previous year.The move adds Simmons to a growing number of hospitality groups that have failed or , entered administration or cut back operations as they face ballooning costs and depressed consumer demand. That has included sharp hikes to employers’ National Insurance Contributions introduced in April, as well as reduced relief on business rates.The British Beer and Pub Association (BBPA) has estimated that 378 pubs will close this year across England, Wales and Scotland – more than one per day on average – amounting to more than 5,600 job losses. Kate Nicholls, chair of UK Hospitality, told City AM who broke the story “Sadly the news of further closures and business failures is all too common at the moment.“Our last survey showed that half of London hospitality businesses are operating at or below break even – up from a third since the Budget. That’s because the costs of doing business – rent, rates, employment – are much higher in the Capital but we have yet to see footfall and visitor numbers recover to pre Covid levels. “Put simply the money coming through the front door is not enough to cover costs and as a result businesses are running out of road – they are being literally taxed out.”
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Lindsey Oil refinery owner Prax goes into administration
Lindsey oil refinery owner Prax falls into administration as ministers urged to intervene One of the UK’s largest oil refineries – and the only big one owned by a British company – has collapsed into administration, prompting urgent calls for government intervention to protect fuel supplies and jobs. State Oil, owner of the Prax Lindsey refinery in north Lincolnshire, called in administrators on Monday, according to Sky News. The company’s 5.4m tonne-a-year capacity represents nearly a tenth of the national total. About 180 people work at State Oil and 440 at the refinery. State Oil is part of Prax Group, majority owned by Winston and Arani Soosaipillai, who bought it from French oil group Total in 2021. Prax Lindsey is the only UK-owned major refinery; others have US and Indian owners. Prax also has oilfield investments in Shetland and owns about 200 petrol stations under the Breeze and Harvest Energy brands, which are not affected by the insolvency. FTI Consulting and Teneo have been appointed by the government’s official receiver to manage the refinery and act as administrator. Sharon Graham, general secretary of Unite, said: “The Lindsey oil refinery is strategically important, and the government must intervene immediately to protect workers and fuel supplies. Unite has constantly warned the government that its policies have placed the oil and industry on a cliff edge. It has failed to act and instead put its fingers in its ears. The government needs a short-term strategy to keep Lindsey operating and a sustainable long-term plan to fully protect all oil and gas workers.” Teneo said: “On 30 June 2025, the high court appointed the official receiver as liquidator [and] appointed special administrators from FTI Consulting LLP to assist the liquidator in ensuring the continued safe operation of the site.” Joint administrator Clare Boardman said all options would be considered, including a sale of Prax’s upstream business and retail operations in the UK and Europe, which remain outside insolvency. Prax’s upstream business includes the Lancaster oilfield in the North Sea, a complex project still in early production. This is the second time in four years Prax Lindsey’s finances have drawn government attention. In 2021, it swung from a £1.9m profit to a £228m loss due to the pandemic. That year, Total sold the refinery to Prax, then a rapidly growing company headquartered in Surrey. Its controlling party, Winston Soosaipillai (also known as Sanjeev Kumar), has almost no public profile. This appears to be a Special AdministrationWhat is Special Administration? Similar to ordinary administration, special administration means giving control of the company to administrators who will take steps to turn a company’s situation around if possible – or to wind it down in the most efficient manner. However in a special administration, client assets must be recovered as soon as possible. Also the running of the company must be done in a way that does not impact the users of the services too much. This is due to the strategic importance of the company. As such large banks (Lehman Brothers) energy companies, hospitals, or other national utilities tend to go into a special administration. Given there are worries about panic buying fuel at forecourts this seems sensible. Special administration is actually run by a court process a bit like Chapter 11 in the USA. This means the administration can take longer.
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River Island To Restructure To Avoid Going Bust – Stores To Close
Update11th AugustThe court has approved the restructuring plan and here is the list of stores to closeFull list of stores on closure list:Beckton Bangor Bloomfield Wrexham Edinburgh Princes Street Hereford Surrey Quays Didcot Sutton Coldfield Aylesbury Burton-Upon-Trent Northwich Taunton Workington Falkirk Cumbernauld Kirkcaldy Gloucester Hartlepool Brighton Lisburn Norwich Oxford Poole Kilmarnock Hanley Barnstaple Grimsby Leeds Birstall Park Rochdale Great Yarmouth St Helens Stockton On Tees PerthAccording to reports, River Island becomes the latest retailer to look at Restructuring Plan as a way to avoid going bust. Just after the Covid Pandemic it was considering a Company Voluntary Arrangement (CVA).A Restructuring Plan binds all creditors not just the unsecured ones. It is similar to a Scheme of Arrangement and is governed by the Companies Act 2006. Creditors will vote and the scheme has to be approved by the court. In a restructuring plan dissenting voters can be forced to accept the plan under what is known as a cross-class cramdown.Hundreds of jobs may go and some 33 stores are likely to close. If you are worried about redundancy then we have this guide pageNegotiations with landlords may see further stores close. More soon.
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Could Thames Water Go Into Administration?
Sky news has said that FTI Consulting have been lined up by the government as special administrators should the troubled utility firm not secure the funding it needs. Any appointment would need to be approved by the court thoughPeople are understandably worried that Thames Water might go into administration. So what does this mean? First of all the process that it would find itself subject to be something called Special Administration. What is Special Administration? Similar to ordinary administration, special administration means giving control of the company to administrators who will take steps to turn a company’s situation around if possible – or to wind it down in the most efficient manner.However in a special administration, client assets must be recovered as soon as possible. Also the running of the company must be done in a way that does not impact the users of the services too much. This is due to the strategic importance of the company. As such large banks (Lehman Brothers) energy companies, hospitals, or other national utilities tend to go into a special administration. Special administration is actually run by a court process a bit like Chapter 11 in the USA. This means the administration can take longer. Why is Thames Water in the news now? Basically there was a deal for KKR (A private equity firm in the US) to inject much needed cash into the company. However it pulled out today putting the company's future in doubt.Thames Water chairman Sir Adrian Montague said that while KKR's withdrawal was "disappointing, we continue to believe that a sustainable recapitalisation of the company is in the best interests of all stakeholders and continue to work with our creditors and stakeholders to achieve that goal"."The company will therefore progress discussions on the senior creditors' plan with Ofwat and other stakeholders."Thames Water has a £16bn debt pile. In any administration the idea is that the business is sold to a buyer. Obviously in the case of Thames Water the only realistic buyer, if no one is prepared to invest in it, is the Government - meaning nationalisation.In any special administration there will be no interruption to any supplies but there could be job losses. If you are an employee and worried about what might happen then look at our guide for redundant employees
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