A company can go into administration when:

  • it is simply not possible to reach agreement with creditors to a compromise or restructuring through out-of-court consensual means
  • agreement is not possible within a manageable time scale. It may be for example that whilst negotiations with the majority creditors are proceeding well, minority creditors are pursuing the company through legal process which threatens to bring the company down prematurely
  • the company is insolvent and the directors are concerned about the risks of wrongful trading

In these circumstances it may be advisable to place the company in Administration.

This is a legal process which requires the appointment of a Licensed Insolvency Practitioner as Administrator, creates a legal stay against creditor action and provides a breathing space in which to develop further proposals to creditors.

Under the Enterprise Act, 2002, this process has been considerably streamlined and no longer requires petitions, independent reports and a court order, merely now requiring a filing in Court.

Once the purposes of the Administration have been met, and subject to being solvent, the company can exit from Administration and revert to the executive control of its management.

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