ABSTRACT
Administrative receivers and their appointors are popularly perceived to hold 'too much' power in relation to troubled companies, and to be able to look after their own interests to the detriment of other corporate stakeholders. The nature and incidents of an administrative receiver's agency, however, are markedly distinct to the point of being unique. Administration was seen as being excessively costly and more difficult to commence than receivership. The chapter investigates the limitations on debt finance introduced by information-gathering, enforcement and collective action costs. The use of debt in a firm's capital structure is thought by financial economists to provide a source of discipline of the firm's managers and owners. The basis of a debtor in possession (DIP) procedure is that the debtor firm's existing management continue to run it, whilst a moratorium of creditors' claims is imposed to prevent them from pursuing individual enforcement.
