Receivership & Lender Enforcement Solicitors

Receivership is a process where a secured creditor appoints a receiver to manage or sell a company’s assets to recover a debt. It is a formal procedure, often triggered when a company defaults on a secured loan.

The receiver, who is often a licensed insolvency practitioner, takes control of the assets and sells them to repay the creditor.

In very limited circumstances, the holder of a debenture containing fixed and floating charges over all or substantially all of the assets of a company may appoint an administrative receiver over the company’s assets and business generally.

A receiver can be appointed when a debtor defaults on loan or other debt obligations and the creditor’s interest is secured over the debtor’s assets (e.g. by way of a mortgage or a charge). The appointment is often made by the creditor or sometimes by the court.

What Are a Receiver’s Powers?

LPA and Fixed Charge Receivers:

• The power to receive and account for income from the mortgaged property.
• The power to sell or otherwise dispose of the assets, if granted by the charge.
• The power to take possession of the assets.
• Powers to protect the assets, for example, by insuring them against damage or arranging for their repair.
• A general power to carry out any action necessary or conducive to getting in, possessing and preserving the assets within the scope of the receivership appointment.

Administrative Receivers:

• Power to collect in and sell property.
• Power to borrow money and grant security.
• Power to insure property and appoint agents.
• Power to establish subsidiaries and transfer viable parts of the business to them.
• The ability to apply to court to dispose of property subject to prior security if it promotes a more advantageous realisation.
• All powers conferred under the security document and Schedule 1 of the IA 1986.

Impact on Directors and the Business

The appointment of a receiver displaces the directors’ power of management over the assets that are subject to the receivership. However, a receivership appointment does not remove the directors from office and, accordingly, the directors may exercise their residual powers in areas unaffected by the receivership. The directors of the company also have the power to challenge the actions of the receiver or to challenge the validity of the charge under which the receiver is appointed.

As the floating charge holder's charge must be over the whole (or substantially the whole) of the property of the company for it to be able to appoint an administrative receiver, the administrative receiver will effectively replace the directors in the management of the company.

• Whether you are a company director, a creditor of the company or a receiver, our expert insolvency and restructuring solicitors can help ensure the best possible outcome is achieved.
• Urgent advice when receivers are appointed.
• Challenging unlawful asset disposals or breaches of duty by a receiver.
• Protecting the position of our clients, utilising both negotiation and litigation where appropriate.

• We are ranked in the Legal 500 and Chambers and Partners for our legal expertise.
• Richard Wolff, our Head of Insolvency, has been recognised as a leading partner by the Legal 500, recognising the strongest partners in their field, leading on market-leading deals and endorsed by peers and clients alike.
• You will receive city-quality advice at regional prices.
• Price transparency – we provide our clients with a cost estimate at the outset of any engagement with ongoing cost updates throughout the matter.
• Our Partner-led service ensures that you receive the very best legal advice and commercially focussed support.
• Our insolvency and restructuring team has in depth experience across a diverse variety of sectors, focused on achieving your objectives and meeting your deadlines.
• We are a full-service law firm operating from a single-site office, which means our teams communicate effectively and efficiently and our insolvency and restructuring lawyers can draw on support when required from other specialist lawyers such as those in our corporate, property and dispute resolution teams.
• Our insolvency and restructuring solicitors use the latest technology to ensure that we are working as efficiently as possible and that geographical distance does not prevent us from providing you with excellent client service.
• Our fast response times enable us to deal with time-sensitive enforcement scenarios. 
• We have excellent working relationships with many national, regional and local independent insolvency practitioners who can be called upon to provide their advice and input as and when required. 
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