Receiverships / Receiver Brief Summary

WHAT'S THE CAUSE?

  • Company unable to pay its debts.
  • Pressure from unsecured creditors or secured creditors.
  • 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.