Receivership
The first myth that needs to be dispelled is that Receivership means liquidation. Because it doesn’t. It is a form of bankruptcy in which a company can avoid liquidation by reorganizing with the help of a court-appointed trustee.
The role of First Recovery in this area is to help your company stay out of trouble and start trading again if possible.
When is a Receiver appointed?
A receiver is appointed when a secured creditor holds a charge over all or some of the company’s assets and the debt cannot be paid. The receiver will take control of the relevant assets for the benefit of the creditor. The other assets are not affected and the company can continue to trade.
Main Goals
- To rescue the company as a going concern.
- To achieve the maximum payment for creditors which would be unlikely in the event that a company is wound up
If necessary the company’s assets can be used to make at least a partial payment to one or more secured or preferential creditors.
