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Receivers & Receiverships

We act for secured parties to recover their debts.

What are receiverships?

A receivership is an insolvency administration where a secured creditor, such as a bank or the Court, appoints an insolvency practitioner to take control of some or all of a company’s assets.

To be the appointed receiver, this practitioner must be independent and suitably qualified.

Why would a company be under receivership?

Typically, business receiverships occur when a company has defaulted on a loan or other financial obligations. Other reasons include:

  • Economic or market conditions: This includes industry downturns and supply chain disruptions.
  • Legal actions: Large legal fees or fines can make it difficult to service debts.
  • Operational difficulties: Mismanagement and declining revenue can erode profitability and strain the ability to make payments.

What does an appointed receiver do?

The powers of the appointed receiver are set out in the Corporations Act 2001. In the case of a Court appointment, the Court’s receivership order lays out the powers.

The appointed receiver’s role is to act in the interests of the secured creditor who appointed them. Their duties often include:

  • Recovering Debts: The receiver’s main goal is to recover the money owed to the secured creditor by either running the business or selling its assets.
  • Managing Assets: The receiver may take control of and manage specific assets (or the entire business) to generate income or prepare them for sale.
  • Facilitating Restructuring or Sale of the Business: The receiver may restructure the business or sell it as a going concern to maximize returns for the secured creditor while minimizing disruption to employees, customers and suppliers.

During the process, the appointed receiver has no obligation to report to unsecured creditors or hold a meeting of creditors. However, they will usually conduct stakeholders should the business be traded-on.

Contact HLB Mann Judd for advice on business receiverships

HLB Mann Judd has been working with receivers and receiverships for nearly 30 years.

We recognise that any sort of insolvency is a stressful situation often made worse by popular misconceptions.

Because of this, we prioritise treating our clients with respect and empathy, ensuring that they receive objective advice that leads them toward the best solution and settles any unnecessary nerves.

HLB Mann Judd provides cost and obligation free consultations to prospective clients. If you feel as though receivership may be appropriate in your situation, please get in touch.

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