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administration order


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1 An order made in a county court for the administration of the estate of a judgment debtor (see judgment creditor). The order normally requires the debtor to pay the debts by instalments; so long as this is done, the creditors referred to in the order cannot enforce their individual claims by other methods without the leave of the court. Administration orders are issued when the debtor has multiple debts but it is thought that bankruptcy can be avoided.

2 An order of the court under the Insolvency Act 1986 made in relation to a company in financial difficulties with a view to securing its survival as a going concern or, failing that, to achieving a more favourable realization of its assets than would be possible on a liquidation. While the order is in force, the affairs of the company are managed by an administrator and the firm is protected from legal action by the creditors to wind up the business. Since 2003 a form of out-of-court administration has also been possible. Under this procedure a company, its directors, or the holder of a floating charge can appoint an administrator with a view to achieving the same purposes as an administrator appointed by a court.

Subjects: Law — Financial Institutions and Services.


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