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Understanding Companies in Liquidation, Administration, and CVAs: Moratoriums and Their Impact on Enforcement Action

When a company faces financial distress in the UK, it may enter an insolvency process such as liquidation, administration, or a Company Voluntary Arrangement (CVA). Each procedure involves specific rules and protections, including moratoriums, that can halt creditors’ enforcement actions—particularly Commercial Rent Arrears Recovery (CRAR) and lease forfeitures.

At UK Bailiffs, we’re breaking down these processes, the roles of liquidators and administrators, and how UK legislation, including the transformative Corporate Insolvency and Governance Act 2020 (CIGA), shapes enforcement options. With practical examples, we’ll show how these rules affect landlords and creditors.

Liquidation and Administration

Important: This guidance is for general information only and is not legal advice. Insolvency outcomes are highly fact-specific. If you are mid-enforcement and an insolvency event is threatened or underway, take advice promptly.

Why this page matters: CRAR sits in a specific legal space — it is statutory enforcement. Writs of control, warrants of control, and liability orders are court-based enforcement and depend on judicial authority.

Companies in Liquidation

Liquidation winds up a company, realising its assets for creditors before dissolution. The two most common routes are compulsory liquidation and creditors’ voluntary liquidation (CVL).

Compulsory liquidation (court)

  • Usually follows a winding-up petition and a winding-up order made by the court.
  • Once a winding-up order is made (or a provisional liquidator is appointed), a statutory stay applies under Insolvency Act 1986, s130(2) — actions/proceedings and certain enforcement steps generally require the court’s permission.

Creditors’ voluntary liquidation (CVL)

  • Initiated by members/shareholders (and typically driven by creditors in practice), with a liquidator appointed without a court order.
  • There is no administration-style statutory moratorium simply because it is a CVL. However, insolvency rules can still affect creditor enforcement and transactions after the commencement of the winding up.

Impact on CRAR & forfeiture

  • CRAR: in compulsory liquidation, enforcement steps after the winding-up order are high risk without court permission (and may be restrained). In CVL, there is not the same court-ordered stay, but post-commencement enforcement can still be challenged/undone depending on timing and facts — so treat as a red-flag and take advice before pressing on.
  • Lease forfeiture: in compulsory liquidation, forfeiture generally requires the court’s permission once the stay applies. In CVL, forfeiture may be possible, but liquidators/creditors can still apply to restrain steps depending on the circumstances.

Example

A retailer enters compulsory liquidation owing rent. If CRAR is attempted after the winding-up order, you are likely into “permission required” territory and risk the steps being restrained or set aside.

Administration

Administration is designed to rescue the company or achieve a better result for creditors. A company may file a Notice of Intention (NOI) to appoint administrators, followed by an appointment (court or out-of-court).

NOI (interim moratorium)

  • Filing an NOI triggers an interim moratorium(commonly up to 10 business days) under Schedule B1.
  • It is often used to pause certain creditor actions while the appointment is prepared. The legal effect depends on the category of action (court process vs statutory enforcement) and the facts.

After appointment (statutory moratorium)

  • Once administrators are appointed, the statutory moratorium is in full effect and many enforcement steps require the administrator’s consent or the court’s permission.
  • If goods have been taken control of pre-appointment, sale or removal may still become restricted once the moratorium bites, depending on the circumstances.

Impact on enforcement

  • CRAR: CRAR is a statutory tool (not “issued by the court”), but administration moratoria can restrict steps against company property. If an administrator is appointed, assume consent/court permission issues arise and take advice promptly.
  • Lease forfeiture: typically requires administrator or court consent during the moratorium (subject to the lease terms and facts).

Example

A tenant files an NOI during CRAR correspondence. This is a red-flag: assess timing, value, and the likelihood of appointment before committing to further steps.

Company Voluntary Arrangement (CVA) and the Part A1 Moratorium

A CVA is a compromise with creditors, supervised by an insolvency practitioner. A CVA does not automatically create a moratorium unless paired with another process. Separately, the Corporate Insolvency and Governance Act 2020 introduced a standalone Part A1 moratorium.

Part A1 (CIGA) moratorium — quick overview

  • Typically starts for 20 business days and can be extended (subject to conditions).
  • A monitor oversees eligibility and continuing rescue prospects.
  • It restricts many creditor actions against the company/property unless permitted.

Impact on enforcement

  • CRAR: where a Part A1 moratorium is in place, assume restrictions apply and engage the monitor early.
  • Forfeiture: may be restricted during the moratorium (and often becomes a negotiation point).

Key legislation (at a glance)

  • Insolvency Act 1986 — liquidation (including s130 consequences of winding-up order), administration (Schedule B1), CVAs (Part I), and other relevant restrictions.
  • Corporate Insolvency and Governance Act 2020 — introduced the standalone Part A1 moratorium and restructuring tools.
  • Tribunals, Courts and Enforcement Act 2007(Schedule 12) and the Taking Control of Goods Regulations 2013 — framework for taking control of goods, including CRAR notice and procedure requirements.

For primary sources, see: Insolvency Act 1986 and Taking Control of Goods Regulations 2013.

Practical considerations

  1. Timing: insolvency is a timing game. The difference between “threatened” and “appointed” often changes what can be done next.
  2. Confirm the status: “NOI filed” is not the same as “administrator appointed” or “winding-up order made”.
  3. Engage early: if a monitor/administrator/liquidator is in the picture, early contact usually reduces wasted cost and preserves options.
  4. Judgment calls: it can sometimes be commercially wise to pause, even where the law may still allow steps — but that should be a choice, not an assumption.

Scenario: A tenant threatens administration during CRAR. A sensible approach is to verify the insolvency status, assess goods/value and urgency, and decide whether to proceed, pause, or negotiate — rather than standing down by default.

Conclusion

Insolvency procedures can change enforcement options quickly — and the language used in emails does not always reflect the legal position. CRAR is statutory enforcement; writs, warrants and liability orders are court-based enforcement. The practical priority is to verify the insolvency status, understand what restrictions (if any) actually apply, and make a considered decision that protects recovery while staying within the law.