Corporate insolvency for dispute resolution practitioners: administration
Corporate insolvency for dispute resolution practitioners: administration

The following Restructuring & Insolvency guidance note provides comprehensive and up to date legal information covering:

  • Corporate insolvency for dispute resolution practitioners: administration
  • Note
  • What is administration?
  • The effect of administration on legal proceedings—moratorium
  • Methods of appointment of administrator
  • The administrator's role and powers following appointment
  • Ending administration

This Practice Note refers to the Insolvency Act 1986 as IA 1986.

Note

This Practice Note contains a summary of the key points relating to administration from a dispute resolution perspective. This Practice Note discusses company administrations only, but an administrator may also be appointed over a partnership or a limited partnership.

What is administration?

Administration is a procedure designed to give a company in financial difficulty breathing space, with a view to either a rescue or a restructure or to allow for a better outcome for all creditors than a liquidation would allow. Administration is designed to be a short process and should generally last no longer than a year.

The modern administration regime is to be found in the IA 1986, Sch B1 and was introduced on 15 September 2003 by the Enterprise Act 2002. This simplified the administration procedure and made it a more accessible process, aiming eventually to replace the old administration and administrative receivership process altogether. All charges created on or after 15 September 2003 must use the new administration procedure.

The key to administration is that the administrator (who is an insolvency practitioner (IP) appointed to manage the company's business and property) must try to achieve one of the three 'purposes' of administration, which in order of priority are:

  1. to rescue the company as a