ADVOKS GLOBAL · KENYA
Insolvency Act
561. Interim moratorium when application for administration order has been made
Edition: 2022-12-31 · In force
561. Interim moratorium when application for administration order has been made
(1)This section applies if an application for administration in respect of a company has been made and—(a)the application has not yet been granted or dismissed; or(b)the application has been granted but the administration order has not yet taken effect.(2)This section also applies from the time when a copy of notice of intention to appoint an administrator under section 523 is lodged with the Court until—(a)the appointment of the administrator takes effect; or(b)seven days from and including the date of lodgment without an administrator having been appointed.(3)This section applies from the time when a copy of notice of intention to appoint an administrator is lodged with the Court under section 546(1) until—(a)the appointment of the administrator takes effect; or(b)the period specified in section 547(2) expires without an administrator having been appointed.(4)When this section applies, the following provisions have effect—(a)a resolution may not be passed for the liquidation of the company;(b)the Court may not make an order for the liquidation of the company;(c)a person may take steps to to enforce security over the company's property only with the approval of the Court;(d)a person may take steps to repossess goods in the company's possession under a hire purchase agreement only with the approval of the Court;(e)a landlord may exercise a right of forfeiture by peaceable re-entry in relation to premises let to the company only with the approval of the Court;(f)a person may begin or continue legal process (including legal proceedings, execution, distress and diligence) against the company or property of the company only with the approval of the Court;(g)a person may take steps to enforce security over the company's property only with the approval of the Court;(h)a person may take steps to repossess goods in the company's possession under a hire purchase agreement only with the approval of the Court.(5)In giving approval for a transaction under subsection (4), the Court may impose a condition on, or a requirement in connection with, the transaction.(6)Subsection (4)(b) does not prevent an application from being made for the liquidation of the company under section 425 or the Court from making a liquidation order in respect of such an application.