9b Receivership Flashcards
What is a receiver?
They are appointed by the creditor of a company in which they have a charge with. They have the right to sell the assets to repay the charge holders debts.
What is an administrative receiver?
Appointed by a floating charge holder and have power over the whole/part of the company’s assets. They can sell them and pay off certain creditors. However these are rarely used since the passing of the Enterprise Act 2002.
What is a fixed charge receiver?
AKA LPA receiver.
Can be appointed by fixed charge holder if the company have defaulted on the loan.
How can a fixed charge holder appoint a receiver?
In order to do this the creditor must make a demand for payment of the defaulted sum and if payment ensues it’s likely the loan document will allow the appointment.
What rights does a fixed charge receiver have?
Can take control of the charged assets and receive rent or sell the asset to allow debt to be paid.
What powers does a receiver have?
- To Borrow
- Commence and take legal proceedings
- Appoint advisors
- Pay off company debts
What duties does a receiver have?
Duty is to the person that appointed them i.e. the creditor and must act reasonably, in good faith and for the benefit of the creditor.
