Law · Corporate Insolvency
Winston Ltd has been placed into administration to attempt a rescue as a going concern. Which of the following is an automatic legal consequence of this order?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1All employees are automatically made redundant to reduce overhead costs during the rescue attempt.
- 2A moratorium is placed on the company, meaning any outstanding petition for winding up is dismissed.✓
- 3Any creditor with a fixed charge may immediately seize the secured asset to recover their debt.
- 4The board of directors is immediately dismissed and replaced by the administrator.
Correct answer
A moratorium is placed on the company, meaning any outstanding petition for winding up is dismissed.
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