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Friday, 8 October 2010

Administration for Woolston Warehouse Developers



North Park (Bradford) Limited was set up as a consortium to carry out the first phase of the Woolston Warehouse project in Bradford. This saw the creation of 106 apartments in the Goitside area of the city centre. The second phase is to build a business hotel. However, the developer is now in the hands of the administrators Deloitte after it emerged that the North Park (Bradford) Limited owed the Yorkshire Bank some £8m.

The administrators are proceeding with the sale and rent of the apartments in order to try and recover monies for the creditors. Deloitte said that the business had suffered from the downturn in the property market. Simon Mantle, case manager for Deloitte, when referring to the bank's position, said; "It just got to a point where it wasn’t really going anywhere and the bank wanted to take control, but that was done via a director’s appointment."

So what does that actually mean? Who can appoint an administrator?

Companies and Directors can appoint an administrator quickly with the insolvency practitioners (IP) guidance. This does not require a Court Order it requires a fax to be sent to the court with the appropriate forms. Clearly the IP must have done some work to establish if the company is insolvent, should it go into administration, what the process will involve and the planned outcome.
Where a company is in liquidation or in a CVA then the proposed administrator must obtain a Court Order.

No administration order will be granted unless the holders of all qualifying floating charges have been given 5 days clear notice of the company’s or directors’ intention to appoint an administrator.

The floating charge holder (usually a bank) will still retain the ability to step in and appoint their own choice of administrator should they so wish.
So it’s possible that board decides to appoint an Administrator and the bank refuses and appoints its own. Quality IP’s will not experience much difficulty if they are recognised by the bank and there is a quality plan to protect the business.

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