It is possible for a company to continue trading while in administration, depending on the approach taken by the appointed Administrator.
Administrator’s role
Once appointed, the Administrator takes control of the company’s operations with the objective of securing the best outcome for creditors and the company. If they determine that keeping the business running will protect its value and improve returns to creditors, trading may continue throughout the administration process.
Exiting administration through a CVA
Should the Administrator believe the business has long-term viability, the administration will need to conclude in a formal way. A common route is via a Company Voluntary Arrangement (CVA), which enables the company and its creditors to enter into a legally binding agreement. This allows for the repayment of some or all debts over time, while giving the business the opportunity to restructure and continue operating.
