bound. The section 895 scheme is, however, more cumbersome than a CVA and the latter process is, therefore, likely to be used in preference.

The players

The insolvency procedures described above involve a number of institutions or actors and (leaving aside the turnaround specialists and other specialists who usually come into play before the operation of the above procedures) these can be outlined as follows:

Administrators

Administrators carry out administration orders under the Insolvency Act 198660 and must be qualified insolvency practitioners. An administrator possesses a wide range of powers, including the power to sell company property, is an officer of the court and can apply to the court for directions. 61

Administrative receivers

Administrative receivers are usually appointed out of court by debenture holders under an express power contained in the debenture. Such a receiver is defined by section 29(2) of the Insolvency Act 1986 as ‘a receiver or manager of the whole (or substantially the whole) of a company’s property appointed by and on behalf of the holders of any debentures of the company, secured by a charge, which, as created, was a floating charge, or by such charge and one or more other securities’. As noted above, the holder of a qualifying floating charge can, after the coming into effect of the Enterprise Act 2002, only appoint an administrative receiver if the charge predated the Act or falls within an exception to the Act’s prohibition on the appointment of administrative receivers by floating charge holders. The administrative receiver is the company’s agent and must be a qualified insolvency practitioner;62 he is an office holder;63 he has broader statutory powers than an ordinary receiver;64 and he enjoys the protection of section 44 of the Insolvency Act 1986 (as amended by the Insolvency Act 1994) concerning liability in respect of new contracts and contracts of employment which he adopts.65

Receivers

Receivers are appointed by creditors with a charge over particular assets or assets given in security pursuant to powers in a debenture and the Law of Property Act 1925. They may also (more rarely) be appointed by the court and, as such, are officers of the court and accountable to it rather than subject to the directions of the creditor in whose interest they have been appointed. Receivers are always in practice made agents of the company. A number of provisions of the Insolvency Act 1986 apply to receivership generally: for example, prohibiting the appointment of bodies corporate or undischarged bankrupts as receivers.66

Liquidators

Liquidators differ from receivers in so far as they act primarily in the interest of unsecured creditors and members whereas receivers look to the interests of the secured creditor who appointed them.67 Liquidators are statutory creatures and are appointed by the company or by the court, usually on an unsecured creditor’s petition. Like administrative receivers and administrators, liquidators must be qualified insolvency practitioners.

Company voluntary arrangement (CVA) supervisors

As previously noted, Part I of the Insolvency Act 1986 and Part I of the Insolvency Rules 1986 provide a statutory framework for voluntary arrangements between companies and their creditors. Central to the CVA is the issuing of a directors’ written proposal to creditors. This should identify the insolvency practitioner68 who has agreed to take responsibility for the CVA (‘the nominee’). The nominee will obtain statements of affairs from the directors, require further information from company officers and report to the court. The nominee will summon a meeting of the company and all known creditors to gain approval of the scheme. If obtained, it is the responsibility of the nominee, who becomes now ‘the supervisor’, to see that the CVA is put into effect. The

66Insolvency Act 1986 ss. 30, 32.

67See Hoffmann J in Re Potters Oils Ltd (No. 2) [1986] 1 WLR 201; and ch. 12 below.

68In the CVA procedure for small companies introduced by the Insolvency Act 2000 there is no requirement that a nominee/supervisor be an IP: see Insolvency Act 2000 s. 4(4) introducing a new s. 389A to the Insolvency Act 1986 to allow persons to act if authorised by a body recognised by the Secretary of State.