What is Receivership?
The holder of a floating charge (usually a bank) can appoint a receiver to sell the assets covered by their charge, in an attempt to recover the amounts owed to them.
The receiver must be an “Insolvency Practitioner” and he has a duty to all of the creditors, not just the floating charge holder. However, his responsibilities to the ordinary creditors are limited to providing a report and Statement of Affairs, and convening a meeting at which the creditors can appoint a committee to liaise with him.
If there are funds available for the ordinary creditors, the receiver will ensure that a liquidator is appointed and will pass the funds to him to distribute.
The receiver has to advise the Accountant in Bankruptcy of their appointment within seven days, and provide details of their investigation into the company’s affairs within three months. Thereafter, the receiver has to file annual accounts and at the end of their appointment send details of the cessation of the case. You can obtain copies of these documents from the Accountant in Bankruptcy’s office.