Insolvency Act 1986, Schedule B1, paragraph 3

SCHEDULE B1 ADMINISTRATION

3(1)The administrator of a company must perform his functions with the objective of—

(a)rescuing the company as a going concern, or

Definitions used in Schedule B1, paragraph 3 3

administrator

1 (1) For the purposes of this Act “administrator” of a company means a person appointed under this Schedule to manage the company’s affairs, business and property.

Defined in Sch.B1 para.1(1) · see it in the full Act

“administrator” has the meaning given by paragraph 1 and, where the context requires, includes a reference to a former administrator,

Defined in Sch.B1 para.111(1) · see it in the full Act
the company

2 Section 233B does not apply in relation to a contract for the supply of goods or services to a company (“the company”) where any of paragraphs 3 to 11 applies.

Defined in Sch.4ZZA para.2 · see it in the full Act
company

(1A) In this Schedule, “company” means—

(a)a company registered under the Companies Act 2006 in England and Wales or Scotland,

(b)a company incorporated in an EEA State ..., or

(c)a company not incorporated in an EEA State but having its centre of main interests in a member State (other than Denmark) or in the United Kingdom .

Defined in Sch.B1 para.111(1A) · see it in the full Act

Cases considering Schedule B1, paragraph 3 105

Glint Pay Ltd & Ors v Jason Daniel Baker & Anor

[2026] EWCA Civ 1023 · 31 July 2026

The court applied the hierarchy of administrators' statutory objectives. Those duties govern an administrator after appointment and do not determine whether the appointor had an improper subjective purpose at the time of appointment. (see paras [77]; [81]-[85]) The court held that the rescue and better-result objectives may not prevent an administrator's appointment from advancing an appointor's alleged improper purpose in the unusual circumstances pleaded. (see paras [77]; [83])

Monarch Airlines Ltd, R (on the application of) v Airport Coordination Ltd

[2017] EWCA Civ 1892 · 22 November 2017

The court applied the administration-purpose provision to explain that an administrator’s options remain open and that prospects of rescue or disposal may change. This made a coordinator’s assessment of realistic future operations inappropriate. (see para [56](ii))

Key2Law (Surrey) LLP v De' Antiquis

[2011] EWCA Civ 1567 · 20 December 2011Limits

The court construed this provision as stating one purpose of administration, pursued through a hierarchy of objectives which keeps the administrator’s statutory options open after appointment (see paras [30]-[35]; [97]-[103]). Rescue of the company as a going concern is the starting or prima facie objective which the administrator must consider, even when it appears immediately unattainable (see paras [32]-[33]; [101]-[102]; [106]). The administrator may pursue a better result for creditors as a whole where rescue is impracticable or this objective would produce the better result. Its possible or expected use does not convert the appointment into liquidation proceedings (see paras [32]-[35]; [98]-[102]). Realisation for distribution to secured or preferential creditors is the lowest-ranking objective and may be pursued only in the circumstances prescribed by paragraph 3(4). Its eventual pursuit does not determine the purpose for which administration was instituted (see paras [32]; [94]; [106]). The administrator must perform functions in the interests of the company’s creditors as a whole. Warren J regarded achieving the best result for those creditors as the overarching objective (see paras [30]-[32]; [106]). The provision requires the administrator to begin with the rescue objective unless one of its specified reasons justifies another course. This legal obligation arises on appointment and displaces reliance on pre-appointment intentions (see paras [32]; [101]; [106]). The administrator need not pursue rescue where it is not reasonably practicable. This qualification does not alter rescue’s status as the statutory starting point (see paras [30]-[33]; [101]). The administrator may pursue the better-result objective where it would achieve a better result for creditors as a whole than rescue. This qualification forms part of the statutory hierarchy (see paras [30]-[33]; [101]; [106]). Realisation for secured or preferential creditors is permitted only where rescue and the better-result objective are impracticable and creditors as a whole are not unnecessarily harmed (see paras [30]-[32]; [106]).

85 more judgments, and what each says about Schedule B1, paragraph 3, are in the case-law panel in the full Act.