What can a creditor do to recover money once a company is placed into administration?
The effect of administration is to create what is known as a ‘moratorium’. When a company is in administration no resolution may be passed for the winding up of the company and no Court order may be made for the winding up of the company. Similarly no steps may be taken to enforce security over the company’s property except with the consent of the administrator or with the permission of the Court. No step may be taken to repossess goods in the company’s possession under a hire purchase agreement, except with the consent of the administrator or permission of the Court. A landlord may not exercise a right of forfeiture by peaceable re-entry in relation to premises except with the consent of the administrator or with the permission of the Court. No legal proceedings may be instituted or continued against the company except with the consent of the administrator or with the permission of the Court.
