RECEIVERSHIP

Receivership is a term used for the appointment of a Receiver, or Receiver and Manager (“Receiver”). A Receiver will normally be appointed under the terms of a security document such as a debenture, for the purpose of receiving and realising assets, and then distributing the proceeds to the secured creditor. A Receiver and Manager has additional powers available to also manage a business.

On most occasions a Receiver is appointed by the secured creditor on terms specified in the security document, and primarily acts in the interests of the secured creditor. It is common for a Receiver and Manger to be appointed at the same time as a Voluntary Administrator is appointed to a company. The Receiver and Manager will act for the secured creditor, while the Voluntary Administrator will look after the interests of the unsecured creditors.

Occasionally the court may appoint a Receiver. This generally arises where there is a partnership dispute and the court makes the appointment so that the dispute can be resolved by an independent party. This often requires a detailed examination of the financial records of the partnership and the disposal of the partnership assets.

The directors and staff of WA Insolvency Solutions have considerable experience in acting as Receivers for financial institutions and other secured creditors, and also on court appointments to resolve partnership disputes.

The role of the Receiver will typically include:

• undertaking an immediate assessment of the secured assets available for realisation and settlement of the debt owing to the secured creditor;
• reporting back to the secured creditor on a regular basis the results of investigations and details of current trading;
• realisation of the secured assets either individually or by sale of a business as a going concern; and
• payment of the secured debt and any other debts with preferential entitlement, such as employee entitlements.