An administrator is appointed over Heron Ltd. In what order of priority must the administrator pursue the statutory purposes of administration?

Correct answer: A) Rescue the company as a going concern; failing that, achieve a better result for creditors as a whole than a winding up; failing that, realise property to distribute to secured or preferential creditors

Explanation

Schedule B1 paragraph 3 of the Insolvency Act 1986 sets a hierarchy of purposes. The first is to rescue the company as a going concern. If that is not reasonably practicable, the aim is a better result for the creditors as a whole than in a winding up. Only if neither is practicable may the administrator realise property to distribute to secured or preferential creditors, without unnecessarily harming creditors as a whole. Shareholder returns are not a statutory purpose.