A hauliers guide to surviving the administration of a large client or customer

The administration, or other insolvency arrangements, of a large customer or client can significantly affect a haulier’s business operation, but there are steps that you can take to prepare for and minimise the impact.

Administration – the basis

The modern administration process was introduced by the Enterprise Act 2002 and its primary focus is a rescue mechanism for a company which is, or is likely to become, unable to pay its debts. It allows such a company to benefit from a statutory moratorium which prevents creditors enforcing any security or claims being brought against the company without authority from the administrator or the court. This gives the company some breathing space from creditor pressure in order for the administrators to achieve one of the three statutory purposes of administration which are (in order of importance) to:

  1. rescue the company as a going concern;
  2. achieve a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in administration); or
  3. realise the company’s assets for the benefit of one or more secured or preferential creditors. 

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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