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.