Up until the enactment of the Enterprise Act 2002 the holder of a fixed and floating charge, typically a bank, could, under the terms of its security appoint an Administrative Receiver to enforce repayment of monies secured under the charges.
The Administrative Receiver, an Insolvency Practitioner (IP) acted as the charge holders agent and was responsible to the charge holder to ensure the maximum return on monies secured by the charge.
In simple terms the Administrative Receiver would act for the Bank to get the Bank’s money back.
There was no statutory obligation to the other classes of creditor and the amounts outstanding to them.
With the Enterprise Act 2002 everything changed. Secured creditors can now only appoint administrative receivers in relation to floating charges created and registered before 15 September 2003.
Qualifying floating charges created and registered on or after 15 September 2003 enabled secured chargeholders to instead appoint Administrators, not Receivers.
Administrators (all Administrators) have a duty not only to their principal but to all classes of creditor.