The key features

• Administration provides temporary respite from creditor pressure, enabling the administrator to fulfil the statutory purpose.  This means that winding up petitions are stayed; landlords cannot distrain for historic unpaid rent; reservation of title, hp/lease and judgment creditors cannot remove their goods;
• The Adminstrator takes complete control of the company, its business and assets.  He can sell or close down part or all of the business; he can make employees redundant;
• The administrator’s prime duties are:
  -  to achieve the statutory purpose of the administration set out in a document called ‘the proposal’ sent to creditors;
  -  to act in the interests of the creditors ‘as a whole’.  He can ‘harm’ a specific creditor or group of creditors, but he must not ‘unfairly harm’ them.  Balance is important.
• Where there is a prepack sale, there are safeguards to ensure that:
  -  The administrator’s decision to prepack is the right one;
  -  It’s conducted properly;
  -  The creditors receive a full explanation from the administrator of his decisions and actions and all the circumstances leading up to it.
• Administration is more expensive than other formal insolvency procedures.  It’s best suited for larger companies, where there’s a business to save, or where there are difficult creditors with claims over the key assets used in the business.