Administration Order

Administration Order in United Kingdom

Definition of Administration Order

In accordance with the work A Dictionary of Law, this is a description of Administration Order : 1. An order made in a county court for the administration of the estate of a judgment debtor. The order normally requires the debtor to pay his debts by instalments: so long as he does so, the creditors referred to in the order cannot enforce their individual claims by other methods without the leave of the court. Administration orders are issued when the debtor has multiple debts but it is thought that his bankruptcy can be avoided.

2. An order made by the court under the Insolvency Act 1986, directing that, during the period for which it is in force, the affairs, business, and property of a company shall be managed by a person appointed by the court (known as the administrator). In order for the court to grant such an order it must be satisfied that the company cannot or is unlikely to be able to pay its debts when due and that the order is likely to allow (1) the survival of the company, or (2) the approval of a *voluntary arrangement, or (3) a more favourable realization of its assets than would be possible under a *winding-up or through an arrangement with creditors.

The Insolvency Act does not specify a period for the duration of the order: it remains in force until the administrator is discharged, by the court, having achieved the purpose(s) for which the order was granted or having decided that the purpose cannot be achieved.

While the order is in force the company may not be wound up; no steps may be taken to enforce any security over the company’s property or to repossess goods in the company’s possession, except with the leave of the court, and no other proceedings or other legal processes may be initiated or continued, against the company or its property, except with the court’s leave.






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