Under-administration

The state of a business, organization, or institution being managed or controlled by an administrator, usually due to financial difficulties, legal issues, or a failure of existing management. This entails the administrator having authority to oversee operations, make decisions, and potentially restructure the entity. It often involves a period of review, reorganization, and potentially, debt repayment or liquidation depending on the circumstances. The goal is generally to preserve the value of the entity or assets for creditors and stakeholders.

Under-administration meaning with examples

• Following a period of heavy losses, the company was placed under-administration. An independent administrator was appointed to assess the company's financial position, identify areas for improvement, and explore options like restructuring the debt or selling off assets to salvage its value. The employees and suppliers were notified. During this time, it cannot take on more debt or make substantial changes.
• The nursing home was placed under-administration after repeated complaints about patient care and financial mismanagement. The new administrator was tasked with ensuring patient safety, addressing staffing shortages, and implementing better financial controls. The local authorities were keen to find a new owner that aligned with the home's reputation. It aimed to bring it back up to the required standards.
• Due to the company failing to meet creditor obligations and facing multiple lawsuits, the court ordered the company to be placed under-administration. The administrator would take charge of all the assets. The board of directors would be able to offer suggestions. This would safeguard the company's interests and ensure an equitable distribution of assets among creditors. It included the appointment of a creditor's committee.
• After the charity's board was found guilty of misappropriating funds, it was immediately put under-administration. The focus of the new administrator was to trace the missing funds, restore public trust, and set up new governance procedures to prevent future financial impropriety. Investigations would take place. Donors were assured their funds would be protected.