Licensed to act in the UK by the institute of Chartered Accountants in England & Wales
Laurence S Burt
A creditor, the company's directors or the company itself can petition the court to place the company into administration.
The procedure is designed to be used by insolvent companies where part or all of the business can be rescued.
The granting of an administration order by the court will result in the appointment of an insolvency practitioner as Administrator and also provides a moratorium that prevents any disgruntled creditors from taking action against the company.
Whilst in office, the administrator will attempt to rescue the company as a going concern but where this is not possible the administrator will realise the assets of the company in the most advantageous way for creditors as a whole.
An Administration order will last for a maximum of 12 months.
© Ganley Burt 2005