The moratorium in administration
Produced in partnership with Kate Rogers of St Philips Chambers
The moratorium in administration

The following Restructuring & Insolvency guidance note Produced in partnership with Kate Rogers of St Philips Chambers provides comprehensive and up to date legal information covering:

  • The moratorium in administration
  • Coronavirus (COVID-19)
  • The purpose of the moratorium
  • When the moratorium applies
  • The effect of the moratorium
  • How to proceed when the moratorium is in place
  • The factors the court will take into account when faced with an application to lift the moratorium

The moratorium is at the very heart of the administration process, which is seen as one of the key tools for a company rescue or restructure of the business. This Practice Note sets out what the moratorium is, how it applies, and the factors the court will take into account when faced with an application to lift it.

The purpose of the moratorium

The purpose behind the moratorium is to give the company/its administrator(s) breathing space to formulate and implement the proposals and to investigate the position of the company, its business and assets. As set out in the section The effect of the moratorium below, the moratorium is a prohibition on proceedings, actions and steps being taken against the company/its property during the applicable period, except with the consent of the administrator (if one is appointed) or the permission, or leave, of the court.

There are in effect two types of moratorium in an administration, the moratorium and the interim moratorium, both of which (with some minor exceptions) have a similar effect.

When the moratorium applies

The moratorium applies during the period of time in which the company is in administration, ie when the court makes an order for administration which takes effect, or the appropriate form is filed at court placing the company into administration, until the date