Receivership

Receiverships generally involve a secured creditor, like a bank or finance company, appointing a receiver to take control of a company’s assets, typically to recover a debt.

The Receiver’s primary role is to protect, collect and sell the company’s assets to recover the debt owed to the secured creditor. A Receiver & Manager is appointed to both manage the business and collect assets.

Receiverships can allow for the company to continue operating while repaying creditors, unlike liquidation, which involves selling assets and closing the company. In doing so, the receiver takes control of the company’s assets, debts and daily activities, potentially managing a business turnaround, or sale of the business as a going concern.

The receiver has a duty to manage the assets in good faith and in the best interest of the company.

Receivership is a form of external administration where the receiver must be a registered liquidator. A receiver may also be appointed by the court, who is appointed to manage and/or realise the assets of a company or individual, usually in the context of insolvency or disputes. The appointment can be made by a court order, often in response to a creditor’s application or to protect the interest of parties involved in a dispute.

Court-appointed receivers’ powers and duties are determined by the specific court order under which they are appointed.