WHAT'S THE CAUSE?
- Company unable to pay its debts.
- Pressure from unsecured creditors or secured creditors.
- Management does not have the skill set to go forward - often business is already strained because of past activity.
- Major failure in business control and management systems.
- Dispute between the directors or shareholders.
- Default on loan repayments to secured lenders.
- Appointment of a Liquidator or Administrator.
- On-going losses and inability to improve trading performance.
WHAT'S IT ABOUT?
- Can occur when
- a secured lender wishes to recover its loan
- an interested party (such as a shareholder, director or investor) makes an application to the Court
- Receiver will realise the company's assets and disburse the funds according to law.
- Can be used to safeguard assets in the interim whilst other Court action proceeds.
- Court appointed Receivers can be used in dispute circumstances.
WHAT IT DOES!
- Independent person controls the assets of the business.
- Independent person manages those assets to recover all or part of the debt for a secured creditor.
- Potential to trade on the company and sell business as going concern.
- Control taken out of the hands of the directors.
- Limited investigations of company's affairs can be conducted by Receivers.