A Receivership is used for the purpose of enforcing security and it will usually be a bank or private equity fund who appoints a Receiver/Manager on foot of a debenture which incorporates a fixed and/or floating charge over the assets of a company.
When is a Receivership suitable?
A Receivership is suitable in a variety of cases but arises primarily when the facility under which funding has been provided is in default or where a company is being placed in or is under threat of Liquidation.
What determines the powers of a Receiver?
The powers and duties of the Receiver/Manager will be dependent on the terms of the debenture under which they are appointed. The debenture will include conditions for the appointment of the Receiver/Manager which may include a loan being in arrears, or the terms of the facility being in default.
What are the duties of a Receiver?
The main duty of the Receiver/Manager is to realise the assets included in the debenture and to discharge the amount owing to the debenture holder. In the case of a debenture which incorporates a floating charge the Receiver/Manager must first discharge the preferential creditors in advance of making any payment to the debenture holder on foot of the Mortgage and/or Floating charge.
How can Baker Tilly assist?
Baker Tilly has years of experience in dealing with receiverships. We can assist your company receivership by:
• Acting as Receiver
• Advising a company where a Receiver has been appointed
Licensed Insolvency Practitioner