Oliver Radley-Gardner & Mark Sefton consider the complexities involved in administrations
According to the statistics published by the Insolvency Service, administrations in the second quarter of 2008 (938) were up 60.3% on the same quarter in 2007 (585). Recent high-profi le instances of administrations to make the headlinesare, of course, the Woolworths and MFI administrations. Th e Insolvency Act 1986, Sch B1, para 3 sets out what the purposes of administration are:
“ (a) rescuing the company as a going concern, or
(b) achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in administration), or
(c) realising property in order to make a distribution to one or more secured or preferential creditors.”
While an administration is in process, para 43 of Sch B1 imposes a moratorium on legal processes, includingforfeiture by peaceable re-entry or service of proceedings. A landlord may only proceed with either the consent of the administrators or the permission of the courts.
The court has discretion to grant or refuse permission, and to impose terms in either
