Receivership Process

A fixed and floating charge over all assets enables creditors to secure a claim over a company’s assets, permitting the sale of the business as a going concern. Typically, banks hold these charges, allowing a single lender or a trustee representing multiple debenture holders to appoint a receiver.

Receiver Manager and Reporting

Receivers (sometimes acting as receiver-managers) control asset realization, often aiming to sell the business or assets effectively. Receivers must notify the Companies Registration Office (CRO) and creditors, providing ongoing updates and financial abstracts every six months on asset values and sales.

Legal Accountability

Receivers are accountable to courts, CRO, and the Director of Corporate Enforcement, with specific duties for managing assets and protecting secured creditor interests. They must prioritize preferential creditors, such as tax and employee claims, from floating charge proceeds.

Asset Realization and Distribution

A receiver’s primary duty is to maximise asset value for debenture holders. This includes prioritizing payment structures from asset sales: first to cover preservation costs, then fees, preferential debts, and lastly to secured creditors and remaining claimants.