Receiverships
A creditor that holds security in the nature of a fixed and floating
charge or equitable mortgage may appoint a Receiver and Manager
("Receiver"), who will assume control of the company's
assets and/or business and realise them in order to satisfy the
claim of the secured creditor. Generally, the secured creditor is
a private finance company, bank or financial institution.
Jamieson Louttit can be appointed Receiver to assist
with the orderly sale of the assets for the secured creditor.
The powers of the Receiver are usually contained
within the security document and the appointment instrument. The
specified powers are supplemented, for companies, by the statutory
powers contained in the Corporations Act and the application of
relevant case law. Generally, a Receiver will be given full powers
to carry on the business, receive income and realise assets.
A Receiver usually acts as agent for the company.
Whilst generally liable for debts incurred for services rendered,
goods purchased or property hired, leased, used or occupied, the
Receiver has a right of indemnity against the assets of the company
subject to the mortgage.
The Receiver is not required to pay any debts due
to creditors from the company prior to the appointment and does
not declare dividends to unsecured creditors.
Where a company over which the creditor has security
is placed into Voluntary Administration, provided the secured creditor
has an enforceable charge over the whole or substantially the whole
of the company's assets, it may, within ten business days of being
notified of the Voluntary Administrator's appointment, elect to
appoint a Receiver in respect of its security. Alternatively, the
secured creditor may allow the Administrator to remain in control
of the company's assets.
Court Appointed Receiver
A Receiver may also be appointed by the Court in
a variety of circumstances, for example, to recover property for
those who are entitled to it. The most frequent type of appointment
is in respect of a partnership where, for example, the partnership
is insolvent or the partners are in serious dispute.
Jamieson Louttit is an Official Liquidator of the
court and may be appointed Receiver by the Court.
A Court appointed Receiver must act in accordance
with the terms of the Court Order by which they were appointed.
The Receiver will usually have powers to realise, or at least manage
the assets in the Receivership.
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