219. Power of Court to fix remuneration of receivers or managers Flashcards
- Power of Court to fix remuneration of receivers or managers
General overview
[219.01] Section 219 provides that a liquidator may apply to court to fix the remuneration of a receiver or manager appointed by a debenture holder to realise the property charged under the debenture. It is common place for a company that was under receivership to go into liquidation. In order to safeguard the pool of assets from being “burnt up” by escalating professional fees and charges of the receiver or manager, the liquidator can apply to court to fix those fees and charges. The priority of payments that a receiver or manager has to adhere to is: (a) section 226 in the case of a floating charge; (b) debenture holder’s outstanding debt and interest; and (c) any balance to be repaid to the company after paying the receiver’s fees and charges. If the company is in liquidation, then the balance would go to the liquidator for the benefit of unsecured creditors. Hence, practically speaking, it makes sense for the liquidator to apply to court to fix the receiver or manager’s remuneration.
