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After commencing the Administration there is a moratorium to protect the company/partnership from action by partnership creditors (it does make it more likely that a creditor will pursue the partners personally, though, creating a challenge for them).
It is worth noting that the Administration is unlikely to pay 100p in the pound to all creditors, and therefore the partners will still have joint and several liability for the partnership shortfall. The partners may need to seek Individual Voluntary Arrangements, or some other solution to deal with this and their own debts.
[See ‘Administration’, ‘Joint and Several Liability’, ‘Individual Voluntary Arrangement’ and ‘Partnership’.
An Administrator is an Insolvency Practitioner who runs an Administration. They will almost certainly have a number of people working with them, especially if the job is a trading Administration – where the business is run whilst seeking to find a buyer for it or its assets.
An Administrator is an agent of the company and an officer of the court. The Administrator has a duty to act in good faith, fairly and honourably, and must also be, and be seen to be, independent and impartial in the management of the company and its property.
On appointment, an Administrator must take all the company’s property into their custody or control.
An Administrator has wide-reaching powers. They can do anything ‘necessary or expedient for the management of the affairs, business and property of the company’.
The Administrator can, as the company’s agent, cause the company to contract with third parties. Sums due under such contracts are paid in priority to the Administrator’s fees and expenses, and distributions to floating chargeholders and unsecured creditors.
An Administrator has a duty to perform functions:
