Receivership

Receivership is the process used by the holder of a charge, usually a bank, when the company is not complying with the terms of the loan. Although the rules on this have changed, an Administrative Receiver can still be appointed provided the charge was registered before 15th September 2003. Banks, or other bodies, that registered a charge after this date, will not have the option of appointing an Administrative Receiver and the process of administration will be used instead of the process of receivership.

An Administrative Receiver is appointed by the charge holder when the charge is a 'floating charge'. His role is to take possession of the charged property and to deal with it for the benefit of the charge holder, this will usually mean selling it. In the event that the charge is a fixed rather than a floating charge, an LPA receiver is appointed rather than an Administrative Receiver.

An Administrative Receiver will carry on the company's business and try to sell the business or assets to satisfy the claim of the bank. The Administrative Receiver can even petition for the winding up of the company, in any event once his task of selling assets is completed, it may be that the only remaining option is to wind up the company.

If you would like to obtain legal advice on receivership or advice about the options for a solvent or an insolvent company, Contact Law can put you in touch with a local specialist Insolvency Solicitor free of charge. So, if you have any questions or would like our help in finding local Insolvency Solicitors please call us on 0800 1777 162 or complete the web form above.