We have in-depth experience in the following areas of receivership:
Administrative Receivership is an option that only secured creditors can use in the event that a business is in breach of borrowing covenants and seeks a remedy. The creditor, usually a financier, with security and holding a floating charge over a substantial part or all of the assets of the business which pre-dates 15th September 2003. The granting of the floating charge or debenture provides the lender with the ability to appoint an Administrative Receiver whose principle duty is to secure repayment of the outstanding loan. In practice this option is not much used in the UK following a change of law in 2003, although there can be advantages to using this form of insolvency process – where available – which we are happy to advise on.
The principle role of Administrative Receiver is to secure the best outcome for his appointer albeit retaining a limited duty of care to the remaining creditors of the company. The Administrative Receiver has powers detailed within the Insolvency Act 1986, which are more often than not expanded within the terms of the debenture. For example, an Administrative Receiver has the ability to manage and trade the company’s business with a view to achieving its sale as a going concern. Alternatively, acting as Administrative Receivers we may recommend only completing outstanding work in progress in order to maximise realisations.
Under the Law of Property Act 1925 a Receiver is a person (not always but often an insolvency practitioner) who is appointed to take charge of a mortgaged property by a lender whose loan is in default, usually with a view to the sale of the property but also to collect rental income for the lender.
We will often work closely with other professional partners, such as commercial and contract consultants and quantity surveyors to devise a solution for the benefit of the secured lender and other parties.
We can also act in cases where there is a commercial dispute as Court Appointed Receivers for example to enforce a judgement where a creditor has been successful with a claim.