Company Receivership Specialist Advice
Do you think that your company may be in need of a receivership? If so, please feel free to call our licensed insolvency practitioner who will talk through your circumstances, free of charge and provide qualified advice on the best out come for you. If you would prefer to research the receivership process for yourself, in the first instance, below is a general summary of this.
Care should be taken not to confuse the term receivership with other insolvency processess as the receivership process is one of the least widely used and typically only actioned by banks seeking to recover their security, see below:-
What is Receivership?
Receivership is a court driven process whereby the Insolvency Practitioner works solely for the charge holder who appointed him. It is most commonly used where a Bank has a charge over an asset of an insolvent company (e.g. a freehold property) and wishes to realise this asset to repay their indebtedness and therefore appoints a Receiver to do this. If possible, the realisations achieved from the sale (less costs, disbursements and expenses) go to the charge holder to repay their debt in full.
This insolvency process is regularly confused with an Administration Order therefore follow the link to review an explanation of the Administration process.
A Receivership is now a less commonly used process as a result of legislative changes to the Administration process resulting in Administrations now being more widely used.
The main advantages of Receivership are…
- The charge holder has complete control over the charged assets meaning their objectives are pursues (quick repayment of their debt and additional fees).
The main disadvantages of Receivership are…
- The Insolvency Practitioner acts only for the charge holder and therefore other creditors can sometimes suffer as a result of this.
- Charged assets can often be sold at less than market value
- The Company Directors have no control over the process.