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Administrator
Practical Law ANZ Glossary w-018-2956 (Approx. 3 pages)
Glossary
Administrator
A person who is appointed the administrator of a company in voluntary administration (section 239B, Companies Act 1993 (CA 1993)). An administrator may be appointed by:
- The company itself, when the directors decide that the company is either insolvent or may become insolvent (section 239I, CA 1993).
- A secured creditor holding a charge over the whole or substantially the whole of the company's property (section 239K, CA 1993).
- A liquidator or interim liquidator if he or she thinks that the company is insolvent or is likely to become insolvent (section 239J, CA 1993).
- The court on the application of a creditor, a liquidator of the company, the Registrar of Companies or the Financial Markets Authority (FMA) (if the company is a financial markets participant) (section 239L, CA 1993).
During the administration, the administrator controls the company's business, property and affairs and has broad powers to manage the affairs of the company (section 239U, CA 1993). The administrator's primary role is to investigate and report to the company's creditors on the company's business, property, affairs and financial circumstances and the options available to the creditors, being:
- To approve a deed of company arrangement (DOCA) which may involve a restructure or reorganisation of the company and part payment of creditors' claims.
- To end the voluntary administration and return the company to the directors' control.
- To place the company into liquidation (otherwise known as a winding up).
The administrator must give his or her opinion on each of the three options and recommend the option that is in the best interest of the company's creditors, which they will then ultimately vote on.
The conduct of a voluntary administration is governed by Part 15A of the CA 1993 (Part 15A has been amended to implement a new licensing and regulation regime for administrators, see the Insolvency Practitioners Regulation Act 2019 and the Insolvency Practitioners Regulation (Amendments) Act 2019. The new licensing and regulation regime commenced on 1 September 2020 (with a one-year transition period for individuals to apply for licensing)).
For more information, see Practice note: overview: Voluntary administration.