Receivership is a process that is usually initiated by a debenture holder against company assets that are subject to a valid, registered debenture.
The receiver is appointed, usually by a bank or other creditor under the powers outlined in the debenture, with a view to safeguarding or selling the assets over which they are appointed so that the debenture holder can recover money owed to them.
The receiver’s powers will be detailed within the debenture itself along with details of the assets over which they are actually appointed. The receiver’s primary duty will be to their appointer however they do also have a duty to creditors in general not to dissipate company assets.
In some cases the receiver will continue to trade the company in order to secure a better realisation for the debenture holder and the creditors in general. The continued trading may allow for the timely realisation of the company’s assets or may be a way of giving the receiver time to sell the business as a going concern and thereby maximize its realisable value.
A Company's assets can be categorised as "Fixed Charge" or as "Floating Charge". How assets are categorised can affect the receivers ability to trade them depending on the terms of the debenture.
A debenture holder relying on monies from a floating charge may only receive their money after the receiver has been paid fees and after the preferred creditors have been discharged. It is often the case that a floating charge has little or no value to the debenture holder once the preferred creditors claims are considered.
McCambridge Duffy can investigate a company’s affairs and determine if a receiver should be appointed or if the company should be financially supported. If a receiver is to be appointed we can advise on the best way to appoint one and we can also act as receivers of both small and large scale receiverships ensuring to maximise asset realisations while minimising costs.
Call us now for free and confidential advice, on 01 247 8899.
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McCambridge Duffy Limited is a Limited Company registered in Ireland
Registered number 527584
Registered office 31-33 Lower Main Street, Letterkenny, County Donegal