A Voluntary Administration is an insolvency procedure where the directors of a financially troubled company or a secured creditor (e.g. a bank with a charge over most of the company’s assets) appoint an administrator.
A voluntary administrator is usually appointed by a company’s directors, after they decide the company is insolvent or is likely to become insolvent. Less commonly, a voluntary administrator may be appointed by a liquidator, provisional liquidator or a secured creditor.
The role of the voluntary administrator is to investigate the company’s affairs, report to creditors and then recommend to the creditors whether the company should enter into a deed of company arrangement, go into liquidation or be returned to the directors.