Administration is more than a legal mechanism — it’s a strategic opportunity. When executed effectively, it can preserve enterprise value, protect employment, and deliver superior returns to creditors. Whether through restructuring, managed asset sales, or creditor negotiations, administration provides a controlled environment for navigating financial turbulence 

During administration, an insolvency practitioner takes control of the company’s affairs, with the goal of either: 

1. Rescuing the Company: This involves restructuring the business, negotiating with creditors, and implementing a recovery plan to return the company to profitability.
2. Achieving a Better Outcome for Creditors: If rescuing the company isn’t feasible, the administration aims to achieve a higher return for creditors than would be possible in an immediate liquidation.
3. Realising Assets: In some cases, the company’s assets are sold off to repay creditors, followed by the company’s dissolution.

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Key Features of Administration

1. Moratorium

Once a Company enters administration, a legal moratorium is imposed. This prevents creditors from initiating or continuing legal action without court approval, giving the Company breathing space to formulate a viable rescue plan. 

2. Administrator’s Role

A licensed insolvency practitioner is appointed as the administrator. They assume control of the Company’s operations and act in the best interests of all creditors, aiming to preserve value and explore recovery options. 

3. Creditor Engagement

The administrator maintains open communication with creditors, presenting a strategy that outlines how the administration’s objectives will be achieved—whether through rescue, restructuring, or asset realisation. 

What Is a Pre-Pack Administration? 

A pre-pack administration is a specialised form of administration where the sale of a Company’s assets is negotiated before the formal appointment of an administrator. The sale is executed shortly after entering administration—often within days—allowing for a smooth transition to new ownership. 

Benefits of Pre-Pack Administration

1. Speed and Continuity 

Because the sale is pre-arranged, the business transitions quickly, minimising operational disruption and preserving enterprise value. 

2. Employee Retention

Continuity of operations often leads to higher staff retention, maintaining workforce stability and morale. 

3. Preserved Reputation

A seamless transition reassures customers and suppliers, helping to protect the company’s brand and commercial relationships.