Receivership

Since 2003 receivership has become less common as a tool for dealing with insolvent companies. If a company has given a debenture before 15th September 2003 it still remains a possibility that a bank may still appoint a receiver. If credit was secured after this date this course of action is now defunct. Administration is now the favoured route by secured creditors such as banks.

The primary role of a receiver appointed by a bank is to recover the money owed to the bank. The change in law instituted in 2003 was to give all creditors an equal chance of recovering debts (ie banks should no longer have favoured status over other creditors).

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