Receivership

As a secured creditor holding a debenture over the assets of the corporation, be it a fixed charge or a floating charge, the secured creditor is able to appoint a Receiver and Manager. The debenture will generally contain the terms and condition fro the appointment of a Receiver and Managers, the powers that the Receiver and Manager whereas the Companies Act 1965 provides the Receiver and Manager with certain duties and obligations. The powers of the Receivers and Managers appointed are wide and varied and include:

  • Taking control over the charged property/assets of the corporation
  • Collecting income on the property/assets with a view to protecting the property for those entitled to it
  • Taking control over the day to day management of the corporation
  • Realizing the property/assets taken over and to distribute the proceeds according to written statutes.
  • The main objective of the Receiver and Manager is to ensure that the property/assets covered under the charge or taken over are fully protected with a view of maximizing recovery to the secured creditor.

    In certain circumstances, it may be possible for the Receiver and Manager for engineer a revival or turn¬around that may be achieved through a restructuring of the corporations’ affairs and/or a scheme of arrangement with its creditors.