Administration

Administration process

Administration is a procedure designed to give an entity breathing space with a view to either a rescue, a restructure or to allow for a better outcome for all creditors than a liquidation. The legislation governing the administration regime is found in Schedule B1 to the Insolvency Act 1986 (IA 1986) and the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, Pt 4. For an introduction to administration, see Practice Note: Administration—an introductory guide.

Purpose of the administration

The administration must be likely to achieve one of the three purposes of the administration set out in IA 1986, Sch B1, para 3 in priority order:

1. 1

   to rescue the company as a going concern, or

2. 2

   to achieve a better result for the company's creditors as a whole than would be likely if the company were wound up, or

3. 3

   to realise property in order to make a distribution to one or more secured or preferential creditors

The company should only remain in administration as long as one of the three purposes remains reasonably capable of being achieved.

Appointment

There