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What happens to me if the company goes into administration?

Published on : 2nd March, 2021 | Updated on : 18th October, 2023
Categories:

Written ByGary Weber

Turnaround & Insolvency Manager (South)

07739 325 008

Gary has been with KSA since late 2010 and is now overseeing the work of all our Regional Managers as well as covering his own patch of the South East. He is passionate about helping companies having been an owner and a director of a number of businesses in industries including pubs, catering, road haulage, and retail. Gary drives our rescue work throughout central and west London, Surrey, W.Sussex, Berks., Bucks. and Oxon.

Gary Weber

Table of Contents

  • Can I be a director of a company in the future if this company goes into administration?
  • If I have provided personal guarantees will these be called in if the company goes into administration?
  • Will I be disqualified as a director is our company goes into administration?

What happens to me if the company goes into administration?

Answering simply, nothing. However, as a director of the insolvent company, if you have not acted properly, as you go through the insolvency process, you may face personal issues in the future.

When administrators are appointed then the directors’ powers cease. They are still responsible for their previous actions though. Usually the administrators will either sell the business quickly or if they trade the company in administration they will make the directors redundant as employees. So you will be sent home.

 

Can I be a director of a company in the future if this company goes into administration?

Yes, you can be a director of as many companies as you would like.  You may be part of a new company that is going to buy the business from the administrators. In which case you must get personal legal advice on conflicts of interest.

Make sure that the company name is acquired before re-using it. And it is obvious, what you shouldn’t do is to act irresponsibly when acting as a director of the old company and then set up another company and do the same silly things again.

Facts:

  • The law requires directors to keep up-to-date financial information and to understand the financial position of the company. If you fail to do this, legal action may be faced by a future administrator or liquidator.
  • Taking cash out of the company as drawings (not dividends) means that you owe the company money. This becomes an asset, a debtor and the administrators or future liquidators must collect that money or do a deal.

 

If I have provided personal guarantees will these be called in if the company goes into administration?

The answer is yes. It is very likely that if the company enters into administration, if you have provided security for company debts in the form of a personal guarantee , then this may be called in. If you’re in any doubt about this please call us . We can help directors with any related problems or queries.

 

Will I be disqualified as a director is our company goes into administration?

NO – as long as you have acted suitably, rapidly and responsibly . If you haven’t, and you knew the company was in serious financial difficulty then YES you may be disqualified…Take back control and protect yourself by asking for expert free help today! – call 0800 9700539

By failing to act and making creditors debts worse or running the company’s cash down to £0 to pay yourself, when other creditors are not being paid; likewise if you are taking some of the firms assets which do not belong to you, legal action by the future liquidator may be faced. But to do that, you would have to be extremely silly!

If you are thinking that the business will soon run out of cash then you must take advice now. Take back control and call us on (0800) 970 0539

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TGI Fridays Secures A Rescue Deal Resulting In 35 Immediate Site Closures

in A guide for redundant employees in administration or insolvency situations Retail What Does Going Into Administration Mean?

Update 07th OctoberBreal Capital and Calveton UK have secured a rescue deal for TGI Fridays, meaning the chain will continue to exist on UK high streets.However, the deal includes just 51 of its 86 sites, forcing 35 to shut with immediate effect.1,012 redundancies have been made - please refer to our guide here on your rights in redundancy.The new private equity owners, Breal and Calveton, jointly own the upmarket restaurant chain D&D London. Between them they have also had investments in Byron Burger and wine bar chain Vinoteca - so they are no stranger to the restaurant world! A full list of the TGI Friday sites closingBarnsley Birmingham Bracknell Brighton Marina Bristol Cabot Circus Cardiff Newport Road Chelmsford Cheltenham Croydon Derby Dundee Durham Edinburgh Fort Kinnaird Enfield Gateshead Gloucester Quays Halifax Jersey Leeds Leeds Trinity Leicester Lincoln Manchester Royal Exchange Newcastle Eldon Square Newport Northampton Prestwich Romford Sale Solihull Southampton West Quay South Speke Sutton Coldfield Swansea Watford NorthUpdate 19th SeptemberHostmore, the owners of TGI Fridays has gone into administration and the 86 sites are now officially up for sale."The sale process remains ongoing, with no decisions having been made to close any existing stores, and TGI Fridays continues to operate normally across the country," a Hostmore spokesperson told the BBC.According to reports in the Telegraph administrators at Teneo, the restructuring firm, are on standby if TGI Fridays cannot sell its restaurants.  The firm ran into trouble following its attempted foray into the US.  The chain has 86 restaurants and employs 3000 people.The owners of the chain, Hostmore, has £35m of debts.The business was spun out of private equity trust Electra in November 2021 in a move that Hostmore chief executive Robert Cook hailed as a “significant milestone”.Its shares started trading at 147p but by March of last year it had lost 90% of its value.  By Monday 16th September 2024 the whole company has been valued at £1m. Could it be that TGIs could go into a CVA? The CVA would only really work if the main problem was high rents or just certain outlets needed to be closed down.  The money that it owes its lender is no doubt secured so they have the power to call in administrators at any time.Without knowing more about its exact financial position it is hard to say.If the company does go into administration it is likely that a number of the restaurants, which are making money, will be snapped up by other restaurant groups and may continue to trade under the TGI brand.  If not then the owners will take advantage of their prime locations.

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TGI Fridays Secures A Rescue Deal Resulting In 35 Immediate Site Closures

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