What does a moratorium in administration imply?

A moratorium in administration primarily serves to protect the company from actions taken by creditors. When a company enters administration, it is typically facing financial difficulties, and the appointment of an administrator helps to stabilize the company's operations. The moratorium effectively halts most legal actions that creditors might initiate to recover debts, providing the company with a breathing space to restructure and develop a plan for viability, thereby maximizing the chances of survival or a beneficial sale of the business.

This mechanism allows the administrator to focus on resolving the company’s financial issues without the immediate pressure of individual creditor claims, which could otherwise lead to a chaotic liquidation or further damage to the company’s prospects. Other options, while they may reflect some aspects of administration, do not accurately capture the core purpose of a moratorium, which is centered around creditor protection during a critical period for the business.