220. Appointment of liquidator as receiver Flashcards
- Appointment of liquidator as receiver
General overview
[220.01] Section 220 provides that in a case of a company which is being wound up by the court, and an application is made on behalf of the debenture holder or other creditors of the company to appoint a receiver, the court may appoint the liquidator to be the receiver at the same time. In other words, the company being already in liquidation, and there is a secured creditor(s) who wants to appoint a receiver and manager, the court may, for ease of consolidating processes and saving costs, appoint the liquidator to be the receiver at the same time. Liquidation and receivership can exist side by side. The liquidator takes possession of the unencumbered assets or free assets of the company for the benefit of the unsecured creditors, whilst in his role as receiver and manager, he will enter into possession of the secured asset(s) charged under the debenture for the benefit of the debenture holder. Any balance after paying off the debenture holder will belong to the liquidator for distribution to the unsecured creditors: United Malayan Banking Corp Bhd v Official Receiver and Liquidator of Soon Hup Seng Sdn Bhd (in liquidation) & Anor [1986] 1 MLJ 75, OCJ ; Re GL Saunders Ltd(in liquidation) [1986] 1 WLR 215, Ch D.
