Receivership Flashcards
1
Q
What is a receiver?
A
A receiver is a person appointed to take control of some or all a company assets.
2
Q
Who may appoint a receiver?
A
a receiver may be appointed by a secured creditor or occasionally by court.
3
Q
What is general receivership?
A
In a general receivership, the receiver will normally have power to manage the company’s business in addition to for example the power to sell assets.
The receiver may wish to continue to trade the business to maintain its going concern value
4
Q
The powers of receivers?
A
- The security agreement or the court under which the receiver has been appointed
- Statutory provisions under the Receiverships Act
5
Q
Duty of a receiver?
A
o Exercise his or her powers in good faith and for a proper purpose
o Exercise his or her powers in the best interests of the appointing secured creditor.
6
Q
Liabilities of a receiver
A
- Liability arising from breach of common law
- Liability arising from invalid appointment
- Liability arising from contracts entered before the receivership
- Liability arising from contracts entered during the receivership
7
Q
What does it mean ‘duty to verify appointment’?
A
- A receiver must take reasonable care to verify the validity of their appointment. The receivers’ solicitors will need to review the relevant security document, the notice of demand and sufficient related documentation in order to verify than an available event of default has occurred.
