The moratorium in administration

The moratorium is at the heart of the administration process and is a key tool to enable either a company rescue or a restructure or sale of the business.

The purpose behind the moratorium is to give the company and its administrator breathing space to formulate and implement the proposals and to investigate the position of the company, its business and assets.

The effect of the moratorium (and interim moratorium) is a prohibition on proceedings, actions and steps being taken against the company or its property during the applicable period. Proceedings against the company/its property can be continued or commenced only with either the consent of the administrator or the permission of the court. For further reading on the moratorium and its effects, see Practice Note: The moratorium in administration.

The process of applying to lift the moratorium

The administrator's consent should first be sought before an application to court is made seeking permission to lift the stay. This is because the administrator may consent to the