WHAT IS ADMINISTRATIVE RECEIVERSHIP?
Administrative Receivership ("Receivership")
is a process under which the charge holder
holds security by way of a Floating Charge,
and appoints an IP known as an Administrative
Receiver ("a Receiver") to realise the assets
which are subject to a Floating Charge. Typically
this will be a bank who holds the Floating
Charge by way of security over assets which
due to their nature e.g. they are perishables
cannot be properly made subject of a fixed
charge.
The Receiver will actually take control of
the company and sell the assets which are
the subject of the Floating Charge and apportion
those funds realised firstly to the discharge
of the floating charge holders' debt.
If there are any funds left over these are
first appropriated to the costs of the Receiver
and then returned to the company.
At the end of the Receivership, there are
a number of routes which can be taken as follows:-
(a) The company can be returned to the directors
and shareholders;
(b) The company can go into administration;
(c) The company can be wound up;
(d) The company can go into a CVA.
In those circumstances a company is subsequently
wound up, information concerning which please
see below. |
