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Silent administrator
A silent administrator is a trustee appointed by the court who acts discreetly, without public disclosure, to prepare for a possible bankruptcy.
A silent administrator, also known as a silent trustee, is appointed in the context of a pre-pack or silent administration upon the application of a company in financial distress. The appointment remains confidential, enabling the administrator to investigate discreetly whether a restart or a sale of assets is feasible.
This instrument is relevant as it increases the prospects of preserving enterprise value and achieving a higher recovery for creditors. Public disclosure could, after all, result in disruption of operations, loss of customers or a decline in asset value.
In practice, the silent administrator is frequently engaged prior to any bankruptcy in order to prepare a sale transaction that can be completed immediately following the adjudication of bankruptcy.
“The court appointed a silent administrator to examine, on a confidential basis, the possibilities for a restart of the enterprise.”
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