Receivership or Administrative Receivership

A lender with a fixed charge can appoint a Receiver and the holder of a fixed and floating charge an Administrative Receiver.

The appointment of either a Receiver or an Administrative Receiver is designed to protect either party or the whole of the business and assets of a company from the actions of creditors with the intention of ensuring an orderly realisation of those assets for the benefit of the Secured Creditors and any other interested parties. An Administrative Receiver has responsibilities to the Preferential Creditors (generally the VAT authorities, the Inland Revenue and certain staff claims) but he has no duty of care to the Unsecured Creditors nor is he allowed to agree their claims.

Administrative Receivership

Our experience before, during and since the latest recession has been that only somewhere between one in five or six of the companies which we review go into Receivership at that time. Where this does happen there is always an education process to go through with the Directors before the event and often a persuasion and comforting role needs to be added to this. These are tasks which we undertake and which can hugely improve the outcome for the Lender if handled well.

Thereafter, we act to maximise the realisations and to create value, always with the Lender's position in mind.

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