Receivership Process
Is your Bank planning to appoint a Receiver?
If so, YOU NEED TO CALL US NOW to get CONFIDENTIAL FREE ADVICE. Be aware that the Receiver will be there to look after the bank, not the directors and not the company. You need someone representing your interests.
What does a Receiver do?
A receiver’s role is to sell assets for the benefit of the Bank. It is almost always the death of the company. The Receiver is not there to look after the company or the Directors. If a Bank ever tells you they may appoint a Receiver then it should be a call-to-action for the Directors. Your company’s problems can no longer be mulled, considered or strategised. YOU NEED TO CALL US NOW.
To read more information on the role of a Receiver, please see below:
- How is a Receiver different to a Liquidator and Voluntary Administrator?
- How often do banks appoint receivers?
- What is a Controller?
- What is a Court Appointed Receiver?
- Who appoints a Receiver and how is it done?
If you’ve read enough about Receivership CALL US NOW for CONFIDENTIAL FREE ADVICE.
How is a Receiver different to a Liquidator and Voluntary Administrator?
Often there will be a Voluntary Administrator or a Liquidator appointed to a company at the same time as a receiver. They each have different roles. The difference between a receiver and a liquidator, is that a receiver’s main duty of care is to a secured creditor, which is usually a bank, whereas a liquidator is concerned with all of the affairs of a company and all of its creditors.
If the Bank is threatening to appoint a receiver you should CALL US NOW for CONFIDENTIAL FREE ADVICE on your options.
How often do banks appoint Receivers?
You have probably heard that Banks don’t like to appoint Receivers. The Bank may have even told you that. Well it’s true. Banks don’t like to appoint Receivers, but they will do it and they do it often.
We still meet Directors who think they’ll be able to restructure their company after the appointment of a Receiver. That will not happen. A Receiver will sell assets for the best price offered and the money will go to pay the company’s debt to the Bank. A Receiver does not try and restructure the company – he just sells assets. If the sale of assets doesn’t fully pay off the debt to the Bank, and if you have given a personal guarantee to the Bank, then you will be liable for the shortfall to the Bank.
If the Bank is threatening to appoint a receiver you should CALL US NOW for CONFIDENTIAL FREE ADVICE on your options.
What is a Controller?
The Corporations Act also covers persons who are referred to as “controllers”. The term is defined as a receiver, or receiver and manager, of that property or anyone else who is in possession, or is in control of that property with the purpose of enforcing a charge.
So the Corporations Act also deals with mortgagees and their agents who enter into possession of secured property owned by a company or who assume control of the property.
If the Bank is threatening to appoint a receiver you should CALL US NOW for CONFIDENTIAL FREE ADVICE on your options.
What is a Court Appointed Receiver?
A Court Appointed Receiver is appointed pursuant to section 1323 of the Corporations Act. The primary role of a Court Appointed Receiver depends on the specific Order made by the Court.
This form of appointment is not as common as a private appointment. It is normal for such an appointment to be made where the Court sees that it is desirable to protect the interests of creditors and shareholders and to preserve the assets of the company until specific matters are resolved by the Court. Insolvency is not a pre-requisite to this type of appointment and more often arises as a result of a partners’ or shareholders’ dispute. Upon the appointment of a receiver by the Court the powers of the directors to administer a company are suspended and they will be excluded from the management of the company.
If the Bank is threatening to appoint a receiver you should CALL US NOW for CONFIDENTIAL FREE ADVICE on your options.
Who appoints a Receiver and how is it done?
The appointment of a Receiver is made either privately, usually by a bank, or by the Court. Private appointments are by far the most common. They are made either under the powers contained in a Mortgage document, Debenture Deed or under powers in Real Property legislation.
The powers of a receiver are set out in the document that allowed the appointment of the receiver. However, the receiver also has additional powers under section 420 of the Corporations Act. The receiver’s main role is to take possession of assets and to manage and realise the assets for the benefit of the secured creditor. The receiver must ensure that all care is taken to sell the property for its market value or the best price that is reasonably attainable.
If the Bank is threatening to appoint a receiver you should CALL US NOW for CONFIDENTIAL FREE ADVICE on your options.
