A receivership arises on foot of a debenture (loan agreement) and the receiver is usually appointed by the debenture holder. The receiver’s main objective is to recover as much of the creditor’s liability as possible. Companies may be hostile to the appointment of a receiver, however the receiver does have a number of options and it does not necessarily result in winding-up the company and ceasing trading.
A receiver & manager is allowed carry on the business of the company if it is deemed appropriate and the debenture can be repaid. Or if circumstances dictate - i.e. it is the most effective means of realising the asset – selling the business as a going concern. Once the receiver has completed his task the company is handed back to the directors.
For further information about our Receivership department please contact:
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