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Administration Orders are made by a Court
to direct that, during the period of the Order, the affairs,
business and property of the company be managed exclusively
by the Administrator.
This is in the hope of enabling the survival of all or part
the company, to approve a Voluntary Arrangement, reach a
compromise between the company and its creditors and
members, or achieve a more advantageous realisation of
assets than would be effected on a winding up.
The company, its directors or one or more of its creditors
can apply for an order. Creditors can be existing,
contingent or prospective.
The Administration must be advertised.
Once enforced, no Administrative Receiver can be appointed,
and if one is in office, that has to be vacated.
On administration, a proposal is prepared by the
Administrator setting out the manner which it is proposed
the Administration will follow. The Administrator will call
a creditors’ meeting to review the proposal and vote on it.
It is the duty of the Administrator to implement the
proposal if a majority vote for it.
If the required majority is not obtained, the company
normally proceeds to liquidation.
When in Administration, it is not possible for the company’s
property to be forcibly sold, nor for any proceedings to
be started against the company in the courts.
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