Administrative Receivership

An administrative receiver may be appointed to a company by a lender holding a floating charge over the company’s assets.

Subject to certain exceptions, administrative receivers may be appointed only under powers contained in debentures executed before 15 September 2003.

Following the appointment of an administrative receiver, the management of the company is placed under the control of the receiver. It is, however, generally beneficial to utilise the expertise and experience of existing directors and staff when continuing to trade. The usual result of an administrative receivership is the sale of the business as a going concern for the benefit of the secured lender.

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