What can an administrator do to my pharmacy, and what can they not?

Q: What do I still have to do as a director?

Four things, none of them optional. Co-operate. Section 235 of the Insolvency Act 1986 requires officers and employees, present and recent, to give the office-holder the information they reasonably require and to attend when asked; failing without reasonable excuse is an offence. Produce the statement of affairs. Paragraph 47 lets the administrator require it by notice: assets, debts, creditors and security, verified by a statement of truth. Expect your conduct to be examined. An administrator may apply to the court under section 246ZB where a director knew, or ought to have concluded, that there was no reasonable prospect of avoiding insolvent liquidation or administration. Ask about the name. If the company later goes into insolvent liquidation, section 216 restricts a former director's re-use of a prohibited name for five years, with exceptions your solicitor applies. Whether a payment was a preference, or whether a board should have stopped trading in June, is for a licensed insolvency practitioner, a solicitor and in the end a court.

rajkamalbhatti

Oct 1

7 min read

The administrator runs the company. From the moment the appointment takes effect they manage its business and its property, and the company and its officers cannot exercise a management power without consent. What they cannot do matters as much: they cannot hand the lease back, cannot occupy the premises rent-free, and cannot take on your professional obligations. Administration changes who decides. It does not change who is answerable for the controlled drugs register.

If this happened last week, start with the first fortnight. Your own position is for a licensed insolvency practitioner and your solicitor.

Who is in control once an administrator is appointed?

The administrator. Paragraph 59 of Schedule B1 to the Insolvency Act 1986 lets them do anything necessary or expedient for managing the company's affairs, business and property, and paragraph 64 stops the company and its officers exercising a management power without consent.

You are probably still a director. Paragraph 61 lets an administrator remove a director or appoint one, but many boards stay in place, because the people who know the rota were running it on Friday. What has gone is the power to decide, not the office or its duties.

What duty does an administrator owe, and to whom?

To the creditors as a whole. Paragraph 3 of Schedule B1 ranks three objectives: rescuing the company as a going concern; failing that, a better result for creditors as a whole than winding up would give; and last, realising property for secured or preferential creditors.

Patients are not on that list. NHS England's Pharmacy Manual (chapter 38, paragraph 69) records that administrators owe their duty to creditors as a whole and have no duty to act in the interests of patients or the NHS. Continuity has to be argued in terms a creditor-facing office-holder can act on: a branch that stays dark loses its nominations to whoever is open, and the Manual records no provision for moving them to another of your own pharmacies.

Can the landlord forfeit, and who pays the rent?

Not by changing the locks, while the administration lasts. Paragraph 43(4) stops a landlord forfeiting by peaceable re-entry and paragraph 43(6) stops other legal process, except with the administrator's consent or the court's permission; paragraph 44 brings that protection forward to a notice of intention to appoint. Paragraph 43 belongs to administration, not insolvency generally, and the court does grant permission.

Rent for the period of use is payable: in Pillar Denton Ltd v Jervis (Game Station) [2014] EWCA Civ 180 the Court of Appeal held that rent accrues day by day as an expense of the administration while the administrator keeps the premises for its purposes.

An administrator cannot hand the lease back. Only a liquidator can disclaim onerous property, under section 178 of the Insolvency Act 1986, and only in a winding up. The guarantee is why that matters: a disclaimer does not, under section 178(4)(b), affect anybody else's liabilities, so a personal guarantee can outlive the lease it guaranteed.

An assignment needs the landlord's consent, and somebody has to ask. In England and Wales, section 1 of the Landlord and Tenant Act 1988 requires a written decision within a reasonable time where consent is not to be unreasonably withheld. Check too whether the lease was contracted out of security of tenure under section 38A of the Landlord and Tenant Act 1954: a short lease prices the same under pressure. Scotland is different throughout: no 1954 Act, a lease continuing by tacit relocation, and irritancy rather than forfeiture.

How long does administration last?

A year, unless it is extended. Paragraph 76 ends the appointment one year from the date it takes effect; the court may extend it on the administrator's application, and creditors may consent to an extension of up to a year. Paragraph 49 requires a statement of proposals to reach the registrar of companies and every creditor within eight weeks. A pharmacy sale is usually settled sooner: a dispensing business cannot be held still.

What is a pre-pack, and what changes when the buyer is connected?

A pre-pack is a sale negotiated before the appointment and completed immediately after it. It is the administrator's decision and responsibility, and no court approves it.

Where the buyer is a connected person — a director, an officer, a shadow director, their non-employee associates or a connected company, as paragraph 60A of Schedule B1 defines it — the Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 (SI 2021/427) apply. If all or substantially all of the business or assets go to such a person within eight weeks of the company entering administration, regulations 3 to 9 require either the creditors' approval or a qualifying report from an independent evaluator.

The evaluator does not have to say yes. A report may say the consideration and the grounds for the disposal are reasonable, or that they are not; both are qualifying reports. A connected pre-pack is neither prohibited nor blessed. It is disclosed.

Who has to be told, and by when?

Three notifications, none triggered by completion day. A body corporate entering administration must notify the commissioner under regulation 67A of the National Health Service (Pharmaceutical and Local Pharmaceutical Services) Regulations 2013, on the day the appointment takes effect; there is no equivalent duty in a liquidation. The General Pharmaceutical Council must be told of a change of ownership within 28 days, or the premises come off its register. And the pharmaceutical list entry does not transfer and cannot be sold: a buyer applies under regulation 26 to be included in place of the outgoing contractor, and in England the integrated care board decides. The NHS contract on a change of ownership has that sequence.

What do I still have to do as a director?

Four things, none of them optional.

Co-operate. Section 235 of the Insolvency Act 1986 requires officers and employees, present and recent, to give the office-holder the information they reasonably require and to attend when asked; failing without reasonable excuse is an offence.
Produce the statement of affairs. Paragraph 47 lets the administrator require it by notice: assets, debts, creditors and security, verified by a statement of truth.
Expect your conduct to be examined. An administrator may apply to the court under section 246ZB where a director knew, or ought to have concluded, that there was no reasonable prospect of avoiding insolvent liquidation or administration.
Ask about the name. If the company later goes into insolvent liquidation, section 216 restricts a former director's re-use of a prohibited name for five years, with exceptions your solicitor applies.

Whether a payment was a preference, or whether a board should have stopped trading in June, is for a licensed insolvency practitioner, a solicitor and in the end a court.

What do I still have to do as a pharmacist?

Everything you did before. The superintendent pharmacist and the responsible pharmacist are separate statutory roles under the Medicines Act 1968, and the people holding them answer personally to the General Pharmaceutical Council. An administrator's instruction is not a defence for either. What stops a branch dispensing in a bad month is rarely the insolvency: it is a superintendent who has resigned to protect their registration, or no responsible pharmacist signed in that morning.

The controlled drugs are the sharp edge, because to an insolvency practitioner the cabinet reads as inventory and it is not.

Registers kept under the Misuse of Drugs Regulations 2001 must be preserved for two years from the date of the last entry (regulation 23), so they cannot go out with the fixtures.
Schedule 1 to 4 drugs may not be destroyed by a person required to keep records except in the presence of, and in accordance with the directions of, an authorised person (regulation 27).
Moving stock to a pharmacy that is a different legal entity is wholesale dealing, needing a wholesale dealer's authorisation under regulation 18 of the Human Medicines Regulations 2012; the pharmacist exemption in section 10(7) of the Medicines Act 1968 was repealed in August 2012.

Whoever was required to keep the records is answerable for them, not the administrator - say so in writing to whoever is instructing a clearance. And buying out of administration does not mean buying without the staff: what happens to the team when a pharmacy changes hands? has why.

What to do next

Get clear, in writing, on what the administrator can and cannot do with your pharmacy, and on what happens to the responsible pharmacist cover and the controlled drugs register. Those are the things that stop a pharmacy trading in practice, whatever the paperwork says.

A licensed insolvency practitioner holds the appointment and a solicitor reads the lease. That work is theirs, not RSB's.

What RSB brings is the operating side: whether the branch can realistically keep dispensing, what a buyer would pay for it as it stands, and which advisers to bring in and in what order. Having run 120 branches and taken a group through insolvency and sale, that judgement comes from the inside rather than from a file.

Tell us what stage you are at, in confidence. The advisers are on the network, and the broader picture is on the pharmacy insolvency page.

General information as at 1 October 2026, and not legal, insolvency, financial or tax advice. The Insolvency Act 1986 applies across Great Britain; the lease law here is England and Wales and the NHS lens is England, with Wales and Scotland running their own NHS regulations and boards, and Northern Ireland its own pharmacy regulator. RSB Consulting is not an insolvency practitioner, a solicitor, an accountant, a lender or a financial adviser, does not hold itself out as any of them and does not act in an appointment; we work on the pharmacy side alongside the people who do. Pharmacy insolvency and distressed sales sets out what that involves, and if an appointment has already happened, tell us where you are.

Rajkamal Singh Bhatti MPharm is a practising pharmacist (GPhC registration 2230365) and a former Superintendent Pharmacist of a national group of 120 branches, which he took through insolvency and sale. He founded RSB Consulting.