Worth A Read, page-66

The question of a valid use of VA is present in my opinion.
Clearly the legislative scheme is premised on the notion that the prescribed
procedure will be used only by those companies genuinely experiencing difficulties
in meeting payments.
The necessary precondition for a valid appointment is that the opinion of the majority of directors is that the the company is either insolvent or likely to become insolvent.
As the Corporations Act is now a Commonwealth statute, this provision
must be read in a “purposive” fashion. Accordingly, it would be inappropriate to permit the valid appointment of an administrator by resolution in circumstances where there is little evidence of
either insolvency or its substantial or reasonable likelihood.
Accordingly, while a company need not be insolvent in order for
the board to appoint an administrator, what is required is that the board turn its
mind to the question and form a bona fide and genuine opinion as to the
solvency (or likely solvency) of the company.

Then there is a question of fiduciary duties.