Waterfall of payments in administration

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Published by a LexisNexis Restructuring & Insolvency expert
Practice notes

Waterfall of payments in administration

Copyright © 2025 LexisNexis

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes
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The order of distribution of a company’s assets in Administration is found in Insolvency Act 1986 (IA 1986) and Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024.

For a guide comparing the Waterfall of payments across the different insolvency proceedings, see Practice Note: Waterfall of payments—a comparative guide.

The scheme for distribution in administration, after fixed charge holders are repaid, is set out below.

Moratorium debts and priority pre-moratorium debts

The Corporate Insolvency and Governance Act 2020 (CIGA 2020) inserted a new Part A1 into IA 1986 providing an insolvency process whereby directors of insolvent companies, or companies that are likely to become insolvent, can obtain a 20 business day moratorium period. This is designed to allow viable businesses time to restructure. Where administration occurs within 12 weeks of a moratorium, any moratorium debts and ‘priority pre-moratorium debts’ for which the company did not have a payment holiday during the moratorium but which were not paid will have priority over all other claims.

These priority debts are defined in IA 1986, Sch B1, para 64A.

For

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Waterfall definition
What does Waterfall mean?

Waterfall (of payments/recoveries) is an order in which liabilities of the debtor are paid out in insolvency or following default.

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